12 December 2022
With the imminent risk of breaching the 1.5°C officially targeted limit on the rise in global temperatures, Europe is vying to lead the way on climate neutrality. With the European Green Deal, the EU pledges that, by 2050, it will have reduced net emissions of greenhouse gases to zero and “decoupled” economic growth from resource use. One-third of the €1.8tn investment from the NextGenerationEU Recovery Plan, together with the EU’s seven-year budget, will finance the Deal.
According to Andreas Beckmann, regional CEO at WWF Central and Eastern Europe, the Deal has energised debate. “The mood music coming out of Brussels from the European Commission has been very good. In light of high energy prices, inflation and war in Ukraine, many in our region have been pushing for delaying or stopping the Green Deal, but the European Commission has generally pushed for the opposite – taking the recent challenges as all the more reason to push forward with the European Green Deal toward de-carbonisation, a circular economy and working with nature, rather than against it."
In light of high energy prices, inflation and war in Ukraine, many in our region have been pushing for delaying or stopping the Green Deal, but the European Commission has generally pushed for the opposite – taking the recent challenges as all the more reason to push forward with the European Green Deal.
Andreas Beckmann, WWF CEE
The Czech Republic assumed the EU presidency this year and is driving Europe’s robust climate and biodiversity agendas, securing mandates ahead of COP27 and other major global summits on environmental protection. “Although the government itself is quite traditionally conservative, the Ministry of Environment has a lot of competent, forward-thinking people and we expect nature restoration to be high on their list,” says Beckmann.
Geopolitical factors loom large
Inevitably, the debate will be influenced by the ongoing conflict in Ukraine. For Erste Group, the current crisis may strengthen the existing “broad and deep consensus” on CO2 neutrality and climate transformation.
Yet the conflict may also require the EU to be realistic when it comes to energy supply, even as it continues to pursue its strategic sustainability targets, says the bank’s CEO, Willi Cernko. “During these very difficult times, some pragmatism is needed,” he says. “We know, for example, that there are ongoing discussions about the extent to which nuclear energy can be seen as green. Or that coal, at least for a limited period of transition, must be viewed as an acceptable energy source. At the same time, the situation shows the urgency to broaden our energy mix. I hope we can seize that momentum and drive change towards more green energy.”
And there are already signs that the bloc is re-assessing how to accelerate adoption of renewable energy as it seeks to replace Russian fossil-fuel supplies.
Everyone must play their part
Beckmann believes that the Covid-19 pandemic brought into sharp focus the interdependence and fragility of global supply chains. “That mirrors our dependency on the natural world. We must approach things in a more integrated way, and understand that, if we change one thing here, it will have an impact elsewhere,” he says.
The interdisciplinary thinking required during the pandemic means that different stakeholders now accept that they need to work together to tackle the complexity of climate change.
ESG was a topic that was predominately for the marketing department, but now, among our corporate customers, it’s relevant for the CEO, and the management teams next to them. It is quickly moving to the top of the agenda.
Willi Cernko, Erste Group
“When it comes to sustainability goals, there is no contradiction between what shareholders ask for and where regulators are heading,” says Cernko, who has seen ESG rise in prominence over the last three years. “ESG was a topic that was predominately for the marketing department, but now, among our corporate customers, it’s relevant for the CEO, and the management teams next to them. It is quickly moving to the top of the agenda.”
This collaborative approach should now extend to how any energy transition is financed. In May 2021, Erste Group successfully issued its first-ever sustainability bond on the capital markets.
This provides additional firepower for the banking group to pursue its ESG strategy, but also underlines its efforts to support Europe’s sustainability goals more broadly. Cernko is clear on the bank’s remit: “Our role is to help in the transition: to make money available when it comes to loans or equity or products for this green transformation. We can also play a role in terms of bridging the gap until CO2 neutrality – how can we provide funding for that?”
The new rules of engagement
WWF’s partnership approach to sustainability has begun to evolve, as corporates in the region shift from a purely philanthropic approach to aligning sustainability with their core business.
Beckmann says that WWF seeks to facilitate action across countries and sectors, including the public and private sectors, civil society and science. “We seek to link work from local impact to policy level, up to the EU Green Deal and its ambitious targets,” he says.
For the past 12 years, WWF has been working with the Coca-Cola Company, with a focus on wetland restoration. More recently, it has been looking at its direct impact, “to make sure that the replenishment work we do is where they're drawing water, where they have a factory. We are also looking into carbon conservation,” says Beckmann. “Of course, [Coca-Cola] is a major purchaser of sugar. So, how can we work together to improve the environment, the production of sugar beets in terms of water use?”
WWF is also working with Tesco in the Czech Republic, Slovakia and Hungary to reform the food system by influencing consumer choices, improving supply chains and enhancing the policy framework. “Food is the biggest driver of biodiversity loss and a major driver of climate change,” explains Beckmann. “We can't solve those problems unless we reform our food systems. So, how can we help set that agenda? It’s an interesting collaboration for us because we each have different strengths.”