Why we can’t keep pushing sustainability to the back of our minds

This year’s Journée de l’Economie tackles the topic of corporate social responsibility, deep diving into the challenges corporates face, and the move towards a Green Transition.

We had an informative conversation with Valérie Arnold, Corporate Responsibility and Sustainability leader at PwC Luxembourg, who will moderate one of the two roundtable discussions during the event. She explains why it’s high time to realign business, economy and societies in order to save our planet and keep our way of life.

1. One of the main topics of the Journée de l’Economie this year is around the Green Transition. In simple terms, can you explain what it is and who is involved in it?

So, a Green Transition is an economic model that enables an absolute decoupling of growth and CO2 emissions. Growth and CO2 emissions are perfectly correlated and it’s somehow logical. Growth was enabled by increased productivity which in turn was enabled by innovation (i.e. steam engine) which functions mainly with fossil fuels since the Industrial Revolution.

For many years now, creation of value has been measured through GDP at nation level and through shareholder value at corporate level. While this has brought tremendously positive things, such as longer life spans and we are all on average more wealthy, it also comes at a great cost for our planet to try and keep up with this. The proof is global warming. In recent years the world has witnessed an increase of natural disasters, inconstant weather changes from very cold to very hot, and the general destruction of villages and cities due to floods and hurricanes. Everything is connected.

2. Why is it urgent that European economies become more sustainable?

There is just no other alternative, scientists are very clear in this. The systemic effect of global warming is connected, among other issues, to the constant attacks on biodiversity. COVID-19 is a demonstration of this. Global warming is also at the heart of top risks for business as highlighted in the Global Risk Report of the World Economic Forum. All businesses are, in one way or the other, dependent on energy and natural resources. If we cannot use fossil fuels anymore – due to global warming and net zero emissions by 2050 – and natural resources run out, it’s impossible for businesses and economies to thrive. It’s important that economies learn how to be more sustainable before they learn the hard way in a few years.

3. Is a future with a “greener” industrial sector on the horizon? What changes would the sector have to undertake to achieve it?

There’s still a long way to go before we reach that horizon but we’ve been further than we are now. Industries are heavily dependent on fossil fuels. To change that, industries will need to be willing to decorrelate growth from CO2 emissions through innovation, going through a transformational journey, changing their business models, and their business strategy to include sustainability goals. Policies and investment strategies will also need to be aligned to adopt and present greener solutions to the industry, its investors and stakeholders.

4. The initiatives to tackle environmental issues have only grown and gained speed since the COVID-19 pandemic spread throughout the globe. Why is it crucial to keep up this tempo in a post-COVID world?

There is no more time left. We need to limit global warming urgently. To give you an idea, the global average temperature rise in the pre-industrial level was 1.5 degrees Celsius in the pre-industrial age level. We’ve already reached 1 degree Celsius. If we keep carrying out as we’ve done so far, and reach above 1.5 degrees, I can tell you our planet will not be a good place to live.

As NASA points out, if we get to that point, 70% of Earth’s coastlines will have a sea-level rise of 0.2 meters, which would result in global coastal floodings and salinisation of water. Furthermore, the polar ice sheets in Greenland and Antarctica would virtually disappear entirely, while most marine and terrestrial ecosystems could be damaged beyond repair. For us humans, the increase of the temperature would mean higher risks for human health through heat-related illnesses, a hit in the supply of freshwater on a global scale, and businesses would struggle to make ends meet due to the strict access to natural resources.

It’s not a pretty picture. It’s time to realign business, economy and society, because while the planet might survive, humans will most likely not be as lucky.

The Journée de l’Economie will take place 29 and 30 April 2021.