The fascinating webinar by Patrick Sheehan from ETF with Uli Grabenwarter and Christian Motzfeldt on Europe's green deal plans indicated how far knocked off course the European Union’s budget has been by covid.
But unlike the millennium goals there can be no extensions to the 2030 timetable, Grabenwarter, head of equity funds at the European Investment Fund, and Motzfeldt, former CEO of Denmark’s growth fund, said.
To resolve the tensions, Motzfeldt recommended the approach that underpinned Denmark’s follow-up €3.5bn green future fund.
From thinking of the fund as an expense to an investment opened politicians and bureaucrats’ minds to the potential to make a financial return as well as helping society and the environment.
Motzfeldt, along with Global Corporate Venturing, had been behind the open letter calling for Europe to put in place a “sustainable and equitable investment plan”.
With a mindset shift alongside regulatory integration of externalities, as noted by the Economist this week, it becomes possible to look at countries and the world as a system not just see the challenge of the environment by itself.
Grabenwarter gave the example of the European car industry, “which we all know has to move to fully carbon-neutral.
“But the car makers cannot just replace their entire production fleet even if today there is a 12 to 18 month wait for hybrid or electric vehicles.”
Motzfeldt said the first part was a green power producing ecosystem, which is why the European Battery Alliance has been set up and there has been interest in Japan-based Panasonic working with Norway-based Equinor and Norsk Hydro on developing a lithium-ion battery business.
As Motzfeldt said: “It is possible within 10 years to be 100% solar or wind and battery powered at a lower price than fossil fuels. Wind has already gone in the past decade from a small to large industry and we are waiting on solar but the key will be the returns.”
Grabenwarter said the EIF had already experience in building an ecosystem after supporting venture capital funds after the dot.com crash after the millennium. “Now we face the same challenge in the environment.”
The key was the shift so any business to be competitive in future had to monetarise societal value.
With George Serafeim, professor at Harvard Business School’s, speech at the GCV Digital Forum 2.0 at the end of September on how impact-weighted accounting standards are now coming in to enable investors to judge the externalities the building blocks for systemic change are now coming into place.