Competitive Sustainability and the achievement of SDGs

Competitive sustainability

In a speech delivered to the European Parliament Plenary on the occasion of the presentation of the College of Commissioners and their programme on 27th November 2019, President-elect Ursula von der Leyen called for concerted efforts from European countries to kick-start a radical transformation of society and the economy.

She urged the audience to contribute towards completing the transition to climate neutrality by mid-century, while combining it with principles of justice and inclusiveness. She recalled the commitments that every EU member state made to achieve the Sustainable Development Goals (SDGs) by 2030 – a set of goals and targets agreed at the United Nations in 2015 for both developed and developing countries alike.

The importance of SDGs to set the course for public policies in the next decade cannot be understated. At SOAS University of London, we pay attention towards SDGs in large part of our curriculum, including the SOAS Summer School on “Achieving the Sustainable Development Goals”, that will be offered from 29 June – 17 July 2020. In this spirit, the speech by President-elect von der Leyen provides the opportunity to share some reflections upon how SDGs can be achieved.

Competitive Sustainability: What is it?

In the 27th November speech, President-elect von der Leyen argued:

“We should never forget that competitive sustainability has always been at the heart of our social market economy. We just called it differently. Think of the family-owned businesses all across our European Union. They were not built solely on shareholder value or the next bonuses. They were built to last, to pass down generations, to provide a fair living to employees. They were built on passion for quality, tradition and innovation. The things we make today may have changed. But we must rediscover our competitive sustainability, dear friends here in this House.”

One can hardly fail to notice the recourse to the concept of “competitive sustainability” in the speech. But what does “competitive sustainability” mean? Following sentences in the speech seem to relate the concept to broad principles of stability, solidarity across generations and between employers and employees, meaningfulness, and engagement, within a frame of reference that contrasts them against (broadly speaking) profit-seeking and utilitarianism.

While one can sympathise with such understanding, we should also remind us that “competitive sustainability” also bears a more specific meaning within scholarly circles, which could help substantiate the principle into more specific policy actions.

To be fair, the phrase “competitive sustainability” does not occur too often in scholarly literature. A Google Scholar search returns 1,060 results, and a Web of Science one just about 18 entries (accessed on 1/12/2019).

A superficial review of the titles suggests that most of the time, “competitive sustainability” is part of a discourse around the environmental sustainability of particular technologies, while other times it is referred to forms of competitive strategies that take into account the sustainability dimension while cultivating and protecting firms’ distinctive resources of positioning a business in the industry.

At least one study, however, stands out as providing a more articulate definition of “competitive sustainability”, which Robert Z. Housman and Durwood J. Zaelke (1993) defined as:

“mechanisms for achieving sustainable development by harmonizing domestic and international environmental standards through the use of competitive forces which reward the cleanest and most efficient economic actors.”

Housman and Zaelke (1993) elaborated the idea further by arguing that a mutually reinforcing mechanism of incentives and disincentives at the international level would direct trade and environmental policies to attain sustainability goals. They also argued that countries could coordinate and provide an “upward harmonization” of domestic and international environmental standards, with resulting effects of higher environmental and social protection.

Although their arguments date back to more than 20 years ago, they reverberate into important considerations about the formulation of industrial policies and the reconfiguration of the global value chain in the contemporary context.

Conclusion

Like most countries in the world, EU member states are expected to intensify their efforts to attain the transition towards climate neutrality and, more generally, the SDGs. Competitive sustainability underpins the selection of policy tools and measures that are intended to stimulate upward harmonization of standards.

Yet, what sort of industrial policies would better support the transition to climate neutrality? What sort of strategies can companies devise in order to reap the opportunities and tackle the challenges of competitive sustainability?

These and other questions call for more detailed attention to policy options, country conditions, and implementation challenges, which will be discussed at the 2020 SOAS Summer School on “Achieving the Sustainable Development Goals”.

Join us in July in London!

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