IESE Insights on the European Green Deal

Recent report by IESE shares fascinating insights on the European Green Deal and its role in global recovery from the COVID pandemic.

The European Union has remained steadfast with its Green Deal despite facing major obtsacles. IESE’s Insight Report reveals that the program may be the key to recovering from the Covid-19 crisis. For instance, EU introduced a €1.8 trillion stimulus fund to keep recovery on the green deal track. The region is leading the way with over 20% of its stimulus plan directed at green, climate related initiatives (for more information, view the EU’s official Green Deal site).

To sustain the green revolution, this transformative process will require a concerted effort by all nations. The world seems to agree that rebuilding in a sustainable way is necessary. The race to decarbonization entails everybody moving in the right direction, not just governments and politicians but also companies and investors. The good news is that there is evidence of this happening. ESG (Environmental, Social and Governance) investing has grown to represent more than $30 trillion in global assets under management. 

There is an asset class that is contributing towards the green revolution: green bonds. This instrument allows all types of investors take an active role by investing in pro-environment, pro-planet projects. The European Union plans to spearhead this movement by funding a substantial portion (30%) of its sustainable recovery with green bonds.

Why is sustainability important? IESE Dean Franz Heukamp has emphatically stated that

“We have a moral duty as managers to do right by others and the world.”

Putting people alongside planet and profit is the famous triple bottom-line for business, a view that is gaining traction. European CEOs reported they anticipate the shift from profit to the triple bottom-line will be the mainstream view by 2025.

The European Green Deal is the model for growth, a plan to invest in innovative technologies and sustainable jobs. It only serves as an impetus for each one of us to contribute to the emerging green economy. At the end of the day, we have the responsibility to make the world a better place to live in.