Summary: March 27, 2003: International Dialogue: article by the Union of Industrial and Employers' Confederations of Europe (UNICE): "Contribution of business to sustainable development".
In the context of the Johannesburg summit, fresh light was shed on the major cumulative contribution made by European companies to the environmental dimension of sustainable development, the aspect that has attracted most attention in the public debate since the Rio summit. This contribution was particularly well illustrated in the European Commission's 2002 European Competitiveness Report, which describes the impressive achievements of European industry in terms of eco-efficiency. For instance, over the period 1985-1999, energy consumption by industry remained broadly unchanged, despite a rise in manufacturing output of some 29% over the period. Absolute emissions of carbon dioxide fell by over 11% during the same period. Reductions were even more striking in the case of industry's acidifying gas emissions, which fell by around 67% between 1980-1999.
Classical environment policies have played a clear role in these developments, but it is important to realise that these good results are also due, to a large extent, to completion of the single market and the increasing deregulation of markets through the Lisbon strategy, which has increased the economic performance of the EU and provided that resources needed to improve the environment. This is a good illustration of the interplay between economic and environmental challenges which underlie sustainable development.
Environmental expenditures by EU industry stood in 1998 at some € 32,000 million, some 0.4% of GDP or 2% of industrial value-added (the latter percentage is clearly much higher in certain sectors). These figures have been on an upward trend since the early 1980s, a fact that calls for a reform in the strategic approach largely pursued hitherto, i.e. very wide recourse to "command and control" regulations. In this reform, a more stimulative framework needs to be put in place for voluntary industrial environmental initiatives and for long-term agreements between public authorities and industry.
The need to leave a wide margin for and to encourage private initiative will increase, given that the challenges of sustainable development can be met in the long term only if efficient solutions are developed to cope with the need for significant transformation in production, transport and consumption patterns.
This will require structural change. Within framework conditions encouraging entrepreneurship, companies are and will continue to be capable of generating and disseminating considerable technological, organisational or logistical innovations, which contribute strongly to structural change and sustainability. The new industrial policy proposed by the Commission in December 2002 has an important role to play to encourage these initiatives and contributions.
The Johannesburg summit focused attention on the importance of the economic and social components of sustainable development, by underlining the priority challenges to be met for combating poverty and giving access to energy, clean water, food, education and a basic health system to the world's growing population.
Society's ability to solve these challenges will largely be determined by the rate of economic growth, and the expansion of international trade and investment. Against this background, business priorities for action at the international level are the following:
1) Implementation of the Doha Development Agenda (DDA). DDA is the right frame for the setting of conditions for trade and investment liberalisation, which is a formidable engine for raising living standards.
2) Good governance at all levels. This is a prerequisite for attracting investment and therefore to ensure sustainable development. Local governments, international bodies and national and EU business have a share of responsibility in applying rules and standards.
3) Capacity-building. In least developed countries lack of technical infrastructures and of human resources seriously handicaps growth and participation in the world economy. DDA's commitments to more coordinated capacity-building and increased assistance must be made operational hand in hand with promotion of the private sector.