A Step Ahead and a Way Forward to Green, Inclusive and Smart Growth

The time when developing countries thought of sustainability as something only the North needed and could afford to worry about is well behind us. A number of trends are driving this. Global issues such as climate, energy, food, water, material prices and the impacts of aging, urbanization and wealth increase are all affecting the economic, social and environmental prospects of countries around the world.

There are some dimensions, missed opportunities and hopeful perspectives when it comes to shifting towards green, inclusive and smart growth. The first is the power of knowledge and information, which could be used to change business attitudes and expectations towards sustainability and innovation. In principle, a vast amount of information and financial power are available, however they are not used to drive corporate change. A significant portion of corporate value is locked-up in intangibles, which are not properly reported, valued or rewarded. Many corporates face challenges today because 1) regulators don't send strong reporting signals; 2) few stock exchanges have sustainability reporting requirements; 3) investors don't know where they are putting their money and 4) consumers don't let their purchasing power talk. Besides this, the power of information is not used to reward good behavior and punish bad, thus preventing businesses from taking innovative and different approaches. Cash value is the only real indicator of corporate performance.

The second is the need for strong leadership. We complain a lot about the lack of leadership. We have seen leadership thrive around social and environmental ideals. And we have seen the base for leadership shift when public interest and self-interest come into conflict.

Looking ahead, in a few weeks leaders will gather in Paris to adopt a climate deal that will not prevent dangerous climate change and not provide developing countries with what they need to cope with the consequences of inadequate action. Many leaders who will attend COP 21 are pragmatists who understand their constituents and will push where they can, but recognize that a deal is a deal and no deal is none. These leaders are receiving strong signals from the establishment that now is not the time for radical change and weak signals from those who believe the time for change has come. In short, it is very difficult for leaders to lead boldly on sustainability when their voters make it clear that they care most about their comfort and the status-quo. Of course there are exceptions. In Sweden, Ethiopia, Denmark, Rwanda and Bhutan - to mention a few - leaders know they have backing for a strong position. In the U.S. and EU, leaders are trying hard to make the best of complex political minefields. If you can use the power of information to change business, you can also use it to change politics.

The third is the importance of impressionism. If you stand with your nose pressed to the canvas, the picture can be depressing, but if you step back, the signs of change are there. Many corporate decisions on risk are taken based on the chance of something happening and the negative consequences if it does. A weak climate deal may not push coal power off the global stage. But combined with poor air quality, enhanced regulation, investor aversion, strong reporting requirements and enhanced technological innovation, it may. The answer to sustainability is not a "one trick pony". The case for change must be made diligently, persistently, from every perspective and based on real arguments.

The fourth relates to the need for pragmatism. The Global Green Growth Institute, the organization I work for is a good example. We are a member-based international organization conducting 37 programs in 22 countries. We begin by doing an assessment of what green growth would mean for them and assess the risks and opportunities related to green growth. We then work with countries to implement strategies in four main areas: energy, cities, water and land use. We are consistently focusing on making the real case, based on real analysis in the national context. We work with governments to help them achieve their growth goals of real inclusive and sustainable change for their people and the environment and help countries to develop green growth plans that are "bankable" - projects that meet investor criteria and that will be implemented.

Kermit was right. It's not easy being green. However, there are signs of optimism over shifting to green, inclusive and smart growth. At a trilateral summit between Korea, Japan and China earlier this month, all three leaders agreed to strengthen cooperation on tackling global issues, including climate change and sustainable development. Also, leaders from the African continent are determined to move towards a more inclusive and greener economy. More than a dozen countries in Africa have made strong commitments to develop green economy strategies or action plans at the national level.

There is a saying that: where there is a will, there is a way. True, but you can also reverse it: where there is a way, there is a will.