If it overcomes its fears and cultural delays, Italy has a great deal to prove. The interview with Professor Enrico Giovannini, founder and spokesperson of Asvis, continues.
On the path towards sustainable development and the United Nations Sustainable Development Goals (SDGs), companies (and everything that revolves around them) must play their part. First and foremost, by opening their eyes to the systemic links between environment, society and economy. And, above all, by having the courage to change their model. Our conversation with Enrico Giovannini, economist, university professor and spokesperson for Asvis, the Italian Alliance for Sustainable Development, continues.
On 1 June, at the Festival of Sustainable Development, representatives of businesses, finance, cooperatives and crafts signed the first Italian manifesto for Agenda 2030. What happens now?
A request has already been sent to all these associations, and beyond, to form a new group to implement the Carta di Milano. We have identified four areas: communication and advocacy, training, sharing of good practices and, finally, entering the Italian public debate. On this last point we are somewhat behind other countries. Apart from a few recognised champions, very few people talk about these issues on television, and so one remains somewhat at the mercy of the media.
Volvo, recently acquired by China's Geely, has announced that from 2019 it will produce only electric cars.
This perhaps explains why Norway has announced it will ban petrol cars by 2025, India by 2032, the United Kingdom by 2040. Here's the thing: if Italy were to commit to doing the same by 2030, or 2025, it would generate an extraordinarily positive acceleration in the rethinking of how mobility is organised (and therefore of our lives), creating a whole range of activities. Of course, if the domestic manufacturer is not Tesla, that is a problem, because there is resistance. It is a cultural resistance, beyond any potential lobbying; there is no champion saying "yes, this really is the right path." That is why, through this initiative with business associations, we would like to grow the number of champions who promote — to borrow Macron's words — an ecological and inclusive transition, which is also economically advantageous.
Read also the first part of the interview
It is also a transition in the allocation of added value. According to a study by Mercedes, 40 per cent of added value will come from batteries and the software that manages energy. So no longer foundries and wheels, but software. We are talking about an industrial revolution.
Exactly, these electric and hybrid engines have much lower maintenance costs because they are simpler than internal combustion engines.
However, it is essential to establish clearly, from a systemic perspective, the future envisaged for the productive sectors and the companies that will need to convert.
This also means giving a clear signal as to where to invest capital. And we know that at this moment there is capital around the world desperately searching for investments.
So, on the list of "post Carta di Milano" intentions, we would like to see some concrete industrial projects.
Absolutely, but above all we need to manage this transition. In Italy we have a great many small businesses, many of which (without knowing it) already operate according to the principles of sustainable development: I am talking about those small businesses where the entrepreneur, the workers and the community form a single whole. For Italian companies this would be a competitive advantage, a further hook for selling the made in Italy brand. This is the great effort we must try to make in manufacturing. In agriculture, on the other hand, the recent regulations requiring the traceability of all processes, coupled with a shift in consumer attitudes, can stimulate an enormous reallocation of demand in favour of a more sustainable food model. Because younger generations in particular are very much in tune with this new development model, while older generations are still anchored to the old — and unsustainable — paradigm by which development equals GDP.
On one hand, companies are focusing heavily on organic and zero-kilometre produce. Conversely, in decision-making processes, the prevailing logic is still centred on cost-cutting (labour costs above all) and flexibility — but how do we create good employment this way?
This is certainly one of the crucial questions to which we do not yet have an answer, given the combined effect of the technological revolution and the cultural lag whereby "sustainable development" is confused with "environment".
And what should we be thinking about if not the environment?
We must think about social sustainability, which is just as fundamental as environmental and economic sustainability. In Austria there is a council for progressive economics, made up of experts and business leaders, that has been working on the great theme of automation and the possible collapse of employment in certain sectors. It has gone so far as to say that the world of the future will not be divided between two components, as many studies suggest — that is, capitalists and highly-skilled workers who will carry out tasks that cannot be replicated by a robot — but that there will be a third component, made up of those who do nothing.
Whether they like it or not…
Mostly not. But without them, who will buy the production made by robots? And in the face of this, there is the question of introducing a basic inclusion income, to create sufficient demand to sustain productive processes.
It remains to be shown whether, or how, a basic inclusion income is financially sustainable.
And indeed they reach the conclusion that what is actually needed is a redistribution of property rights over robots, so that all people — both workers and capitalists — have this additional component of income, which does not pass through the market. Whether this is then achieved through taxation or in some other way remains to be seen. But we can clearly see that the increase in social inequality is damaging to growth.
But while waiting for academics, politicians and governments to do something, what can I, as a citizen, do?
Given that sustainability depends on four forms of capital (human capital, social capital, natural capital and physical capital), I must invest in human and social capital, which are at least partly within my control. Italy — and the experience of Asvis confirms this — is extraordinarily rich in these structures, apparently small, that have in reality kept the country on its feet even during periods of dramatic economic crisis.
So, as a country system, we have a competitive advantage to exploit.
A competitive advantage that nonetheless makes clear that social sustainability is just as important as environmental sustainability. So when an entrepreneur talks only about cutting costs, he is placing his own future at risk in a macro perspective, because there will be no consumers.
Cleaning up the seas – not merely from a purely environmentalist perspective, but from a business perspective in which materials are recovered and given a second life – is a business worth billions.
Technology today shows us that recycling is not only good but also useful and economically advantageous, despite requiring more workers. It is one of the principles of the circular economy: if instead of focusing on cutting the 20 per cent of costs represented by labour, you cut the 80 per cent represented by raw materials, overall costs fall even when more workers are introduced into the production process. As a result, profits increase. It sounds like the Holy Grail, but in reality it simply comes down to understanding that everything is interconnected. We could have reached this point much sooner, had governments and businesses actually accounted for real costs and profits in their balance sheets. https://youtu.be/5G0ndS3uRdo
I'd like to ask you for a bit more information on Goal 17, namely collaboration for the SDGs. I consider it the heart of what is new about the 2030 Agenda.
In one sense it is new, in another it is not, because the development partnership has always existed. The fundamental difference of this new approach is that it wants to help developing countries to develop for their own autonomy, and not merely so that they will then buy the products of developed countries. This applies above all to technologies. The Addis Ababa Forum of July 2015 had placed precisely the issue of technology as an enabling factor and accelerator for development. Instead of transferring our obsolete or environmentally non-compliant technologies to developing countries – and thereby offloading pollution onto them – the logic is precisely that of technology transfer and the building of human capital. This requires a great deal of foresight, but we have seen in this case too that there is far greater competition than in the past. China, over all these years, has taken a very aggressive stance, according to some, in certain parts of the world…
Including Europe, from my point of view…
So this means, once again, that if Europe wants to be the champion of sustainable development, it has a great opportunity to also support its own companies that are at the frontier. It is very positive that Europe has chosen the SDGs as a conceptual framework in its development consensus, which guides all community funds. However, it is also true that national ODAs (Official Development Assistance) continue to play a very strong role, and many countries are well behind, Italy included. The flow of development aid is very low compared to the commitments we have made. We only remember it when migrants arrive by sea, but these are long-term investments.
The other element of the development partnership is the involvement of all parts of civil society and business. Within the National Council for Cooperation and Development there is a working group on public-private cooperation for the sustainable development goals, but Italian businesses are still very far behind when it comes to the idea that, when they operate in a developing country, they are expected to contribute – in addition to their own legitimate activities – to the SDGs.
An interesting project is that of the Jacobs Foundation in Côte d'Ivoire. To combat child labour and slavery in cocoa cultivation and production, it said (to simplify): I will make 10 million available over the next five years if you, the Government of Côte d'Ivoire, guarantee that children will go to school, and if you, the cocoa processing and chocolate production industry, commit to not purchasing cocoa produced through child labour and slavery. It is a wonderful example of concrete collaboration between government, foundation and industry.
It is not an easy industrial and social transformation; other countries and business systems are further ahead. The other great struggle on which international business cooperation is making progress is the fight against exploitation and slavery.
I raised this example also to say that, in order to reduce migration flows, similar projects exist and go to the root of the problems.
The real issue is the stability and persistence of these behaviours. This applies within countries but also in international cooperation. If, that is, cooperation funds are exposed every year to an ongoing battle, and no one knows whether they will increase or decrease, it is clear that this does not generate strong action on the part of businesses.
Businesses need clarity, stable rules…
And this is something on which countries are stronger or weaker depending on their institutional habits, unfortunately.
What can we expect from Asvis in the coming months?
28 September: presentation of the Asvis 2017 Report, which will form the basis for a communication campaign, directed in particular at political forces and movements, to ensure that this becomes the issue of the next elections and, above all, of the next legislature. If that does not happen, we will reach 2030 without having honoured the commitments we made.
It is paradoxical that the Italian press during the G7 devoted extensive coverage to Trump withdrawing from the Paris Agreement rather than discussing what we ourselves are doing to honour it, as though it were a news story rather than a political problem. Let us suppose for a moment that it had been Gentiloni saying something of the sort. Would we, in Italy as in the United States, have had regions or cities responding We are still in? In my view, some would probably have replied: "Paris who?" Others would have said: "Come on, it was just a piece of paper signed at the UN, these things don't matter…". A third possible reaction: "Given that there is an Italian law requiring the dismantling of environmentally harmful subsidies, amounting to 16 billion euros a year, perhaps on balance it's not such a bad idea to pull out of Paris and put this whole thing off, since it risks costing me votes at next year's elections."
Of course, an economic system that apparently makes pollution free, or nearly so, would create other "competitive advantages", so to speak.
Of course, and then we discover there is no water because we have not invested in water management, and then we discover that agriculture is in ruins because of climate change. Until now these things were never connected, but by now the crises are so frequent that some people are starting to ask the right questions. In any case, after the report we will run a major campaign to s
