HOW DO TODAY’S MANAGERS MEET THE SUSTAINABILITY CHALLENGE?
In the recent State of the Union address, the President of the European Commission, Ursula Von Der Leyen, announced that she intends to raise the target for reducing greenhouse gas emissions by 2030 from -40% to -55% of 1990 levels. By 2050, Europe aims to zero net emissions and become the first ‘climate neutral’ continent and is deploying a huge financial effort to this end. Of the more than €1800 billion recovery plan decided in July, at least 30% (€547 billion) will be earmarked for the green transition. This will be complemented by substantial private investment mobilised by the public sector to build enabling infrastructure and define appropriate rules and incentives.
Asset management companies are also analysing the impact of fiscal stimuli and investment plans and agree that the post-Covid-19 economic recovery will be green and digital. “Recent research shows that investment in clean energy creates three jobs for every one lost in the fossil fuel sector, and that for every $1 million that switches from fossil to green energy, an average of five jobs are created,” reports Irene Lauro, economist at asset management group Schroders. However, in addition to this employment-related reason, as already mentioned, it is primarily the fiscal stimuli put in place by States that have shifted the attention of companies and investment funds to projects that involve greater spending on infrastructure, provided that it is “green”.
The European green investment plan, Ursula Von Der Leyen’s well-known New Green Deal, has become the real point of reference for investors who are looking beyond the Covid. But the Green Deal does not just mean renewables, far from it. A good summary of the EU plan was made by Alessandro Caviglia, investment manager of Cordusio Sim (UniCredit) in the outlook entitled: “The era of new infrastructures“:
“The European Green Deal is at the heart of the European Union’s recovery strategy, through:
- a massive wave of building and infrastructure renovation and a more circular economy, creating local jobs;
- the launch of renewable energy projects, in particular wind and solar, and the launch of a clean hydrogen economy;
- greener transport and logistics, including the installation of one million charging points for electric vehicles, and encouraging rail travel and green mobility in our cities and regions;
- the consolidation of the Just Transition Fund to support redevelopment, helping businesses to create new economic opportunities”.
In order to achieve the objectives of the European New Green Deal, the Italian government aims in particular to run along three tracks:
- guarantee funds for green investments and eco-bonuses
- tax relief for companies and managers who achieve ecological conversion targets (‘green bonus’ for managers)
- financing of circular economy projects
This opens up a challenge, but also an opportunity, for Managers who must deal with this transition imposed by Europe but, at the same time, necessary for the sustainability of their business and brand image.
In this process of change, Cahra’s Transition Managers can be at the side of Italian companies to help them achieve the first objectives set by the Government:
- CIRCULAR ECONOMY: Zero-waste factories targeted
Funding is coming in for projects linked to the development of the circular economy, i.e. those production cycles in which materials are reused and put back into circulation so as to extend their life cycle, minimising waste and environmental impact. The government plans to support both the support structures needed by companies to encourage reconversion and the possibility of public investment.
- FISCAL: Relief for managers who innovate
A tax bonus is coming for green managers. Or rather for companies that ask their executives to achieve results in the ecological reconversion of the activity and the production cycle. The government’s idea is to ensure mechanisms to reward, in terms of taxation, companies that manage to create economic value by converting to a sustainable and ecological direction. The intertwining with guarantee funds would, in the Government’s intentions, create a mix of incentives capable of pushing towards a green turnaround.
Sources:
State of the Union 2020 – https://ec.europa.eu/info/strategy/strategic-planning/state-union-addresses/state-union-2020_it
Green Deal – https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_it
‘Bonuses for “green” companies and managers. A 75 billion plan for the green turnaround’, La Stampa – https://www.lastampa.it/topnews/primo-piano/2020/09/28/news/bonus-ad-aziende-e-manager-ecologici-75-miliardi-per-la-svolta-verde-1.39356821
Green versus brown: Comparing the employment impacts of energy efficiency, renewable energy, and fossil fuels using an input-output model’, HeidiGarrett-Peltier – https://www.sciencedirect.com/science/article/abs/pii/S026499931630709X#!
‘The recovery will be green and digital: here’s how funds are positioning themselves’, IlSole24Ore – https://www.ilsole24ore.com/art/la-ripresa-sara-green-e-digitale-ecco-come-si-stanno-posizionando-fondi-ADFwpZo
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