Greening the Economy: New Energy for Business is the highly topical theme of the sixth European Business Summit (www.ebsummit.eu), co-organised by FEB and BUSINESSEUROPE. The European Commission recently announced its energy and climate package, which sets out very ambitious objectives for 2020. Turning climate ambition into reality is a major challenge to European businesses, and especially to Belgian companies, which are already eco-efficiency leaders. To gain a better insight into how our businesses can cope with the climate challenge and to see what kind of supporting role policy can play, FEB commissioned INSEAD, the international business school, to carry out a research project.
The report is entitled Greening the Economy: Creating a Climate for Change.
Frank Brown, Dean of INSEAD, described the framework for collaboration between FEB and the international business school: “Our institution always encourages diversity in research and teaching methods. We are willing to experiment and innovate. INSEAD is a knowledge partner at EBS. In this context, INSEAD has been requested by FEB to write a report on the occasion of the 6th European Business Summit, with the support of Shell and Microsoft, on Greening the economy, creating a climate for change. The INSEAD report indicates that the collaboration of industry, academia and government are required to achieve the goal of improved energy performance.” The context is clear: the rising demand for energy and the absolute need for lower CO2 emissions are forcing all social stakeholders – governments, citizens and businesses – to take rapid action. In this context, three factors are critical to (macro-)economic growth: energy performance (minimal CO2 emission per GDP and per capita), eco-innovation performance and investment in clean energy technologies. The FEB-INSEAD report analyses these three parameters and compares Europe to the other continents.
This yields the following findings:
1. In terms of energy performance (expressed in CO2 emissions per unit of
GDP), the study confirms that the EU is improving its score (by using the best available technologies), while China’s emissions are rising due to the dominance of heavy industry and its strong dependence on coal as an energy source. If we look at lifestyle and energy consumption (based on per capita CO2 emissions), Japan, China, India and Australia score more positively than Europe (middle position) and energy-guzzling North America.
2. Japan has the highest overall innovation score, closely followed by North America. The European Union (EU-25) scores lower while India and China lag behind. The EU scores very high globally for in particular eco-innovation (patents for clean technologies in vehicle motor abatement, solid waste treatment and renewable energies) and this is especially encouraging.
3. The researchers based their assessment of the investment parameter on venture capital (VC) investments in clean energy technologies. In the EU, cleantech venture capital activity climbed from 8% of all VC investments in 2003 to 19% in 2006, whereas recent growth in the United States was less pronounced (rising from 6.4% in 2003 to 8.5% in 2007). This trend is also very promising for the future.
Lastly, the report presents three action areas where efforts can be made to strive for a greener economy:
1. Reduce emissions by benchmarking energy performance standards, promoting greater energy efficiency and promoting renewable energy
2. Promote innovation by exploring specific eco-business strategies, opting for radical ecoinnovation, which offers consumers added value at a lower price and a smaller environmental impact , and pursuing a stable and consistent policy
3. Encourage investment by providing further support for cleantech VC investment and bolstering public-private partnerships to facilitate taking innovations to the market.
Rudi Thomaes, CEO of the Federation of Enterprises in Belgium, comments: "European and specifically Belgian industry are world leaders in the efficient use of energy. The FEB-INSEAD report shows that Europe scores highly in eco-innovation globally. The challenge facing Europe is to convert its comparative advantages into commercial success, mainly by enhancing the investment and marketing dynamic. EU businesses can play a critical role in worldwide technology transfer and the exchange of best practices with a view to higher energy efficiency, lower CO2 emissions and renewable energy. European policymakers, universities and businesses must cooperate intensely in order to achieve all this.”
