Green growth model - an opportunity for business

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The planet's resources will soon not be enough to support the growing world population, nor will it be possible to maintain a linear economic growth model which assumes that resources are abundant, available, easy to source and cheap to dispose of — hence the expression "take-make-consume and dispose". European Union flagship initiatives aim to shape the transition to a more circular economy. In addition to bringing economic benefits, this should prioritise efficient use of resources (metals, minerals, fuels, water, land, timber, fertile soil, clean air and biodiversity), allowing products to retain their added value for as long as possible and as little waste as possible to be generated and taken to landfills.

Achieving these objectives implies a productivity review across the whole value chain. If we assess the performance of each individual component, it is possible to outline a strategy geared towards building a more sustainable supply system while ensuring attractive profit margins. Introducing more efficient technology can achieve net cost savings in a variety of ways, including:

  • better use of resources,
  • better process efficiency,
  • waste disposal,
  • improving quality and logistics,
  • redesigning products to prolong the life cycle and generate less waste,
  • energy efficiency,
  • shrewder management of energy demand across the value chain as a whole and in the R&D phase.

To assess a product’s impact, it is necessary to analyse its entire life cycle (from design to landfill) and construct an analytical framework that compares the pros and cons of its use. Practices leading to greater resource efficiency, technological innovation and more jobs in the field of developing ‘greener technology’ are vital. These practices can be achieved through a new culture which:

  • reduces the quantity of materials required to deliver a particular service (lightweighting),
  • prolongs a product’s useful life (durability),
  • reduces material and energy consumption during the production and use phases (efficiency),
  • restricts the use of materials that are hazardous or difficult to recycle in products and production processes (substitution),
  • creates markets for secondary raw materials (recycled materials) based on standards and public procurement,
  • designs products that are easy to maintain, repair, upgrade, remanufacture or recycle (ecodesign),
  • develops consumer services (maintenance/repair services, etc.),
  • encourages consumers through incentive and support strategies to reduce waste and sort it properly,
  • encourages separate collection schemes that minimise recycling and reuse costs,
  • promotes the grouping-together of activities to prevent by-products from becoming waste (industrial symbiosis),
  • encourages consumers to switch to renting, lending or sharing services as an alternative to owning products to broaden and improve consumer choice while, at the same time, safeguarding their interests.

It is not easy for companies to switch to a green economy as it requires often complex specialist knowledge, but more importantly because procedural and organisational innovation require substantial initial investment, the use of consultants and the continual updating of legal requirements. Eco-innovation can create new entrepreneurial activities and professions related to reuse, repair, maintenance, recycling, composting and eco-design, while simultaneously creating new jobs.

This new green growth model must foster a consensus-based, participatory transition towards this new form of economy if it is to be effective. This in turn could open up a wide range of opportunities for micro, small and medium-sized companies and for the social economy, which could become the main driving force for growth. We therefore believe that priority should be given to:

  • devising and promoting a more widespread voluntary green monitoring mechanism for companies,
  • promoting access to credit through financial engineering and guarantee systems,
  • financing eco-innovation for micro and small enterprises, particularly in a number of demonstrator regions, which can showcase systemic eco-innovations,
  • consolidating in-company entrepreneurial training and tutoring schemes,
  • supporting a circular EU market for materials, components and intermediate products, especially for by-products of building renovation,
  • promoting education and training for the positive development of skills, particularly in technical and professional training schemes that involve social interest groups.

This new green growth model is particularly important for stabilising primary and secondary resources in Europe. It could also prove to be essential for supply security and for the EU's trade balance. Additionally, it provides a good opportunity for small businesses, entrepreneurs and start-ups, as they would be able to react faster to the changing demands of the market and professions, enhancing their models to take advantage of these trends.

 

Antonello Pezzini
Member of the Employers' Group