Anyone who still dismisses human-caused climate change as “scare tactics” is turning a blind eye to reality. Climate protection is the topic of our time. As the largest economy in Europe with a strong industrial base, Germany has a special role to play.
Our actions send signals to other countries. But we also need to seize the opportunity to identify new avenues for innovation and technology. This is the only way we can make a contribution and combine the issues of climate protection and industrial production.
This issue is rightly at the center of the coalition negotiations. All three parties in the Ampelkoalition have declared that they want Germany to remain a future-oriented and internationally competitive industrial location. This is important. After all, the industrial strength of our economy secures employment and prosperity – and thus creates the political and economic capacity to act to cope with the upcoming changes.
However, the question of climate-neutral economic growth cannot be tackled in a national or European solo effort. There is no point in competing for the most ambitious goals. Rather, it must be possible to vigorously drive changes in the global dialogue. That is not easy. The prerequisites and framework conditions in Asia, the USA or Europe are very different.
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Be it with a view to economic development, the energy mix, energy resources or technologies. But there is no way around a concerted international effort. It is to be hoped that the climate conference in Glasgow will help to achieve concrete progress here. What does this mean for the German economy? I am convinced that economic growth and environmental protection do not have to contradict one another.
Prohibitions do not bring about any necessary change
Demands for waivers or bans will not succeed in bringing about the necessary changes. We need trust in the ability to innovate, the competition of ideas and concepts, the targeted promotion of new technologies and the openness to change. Instead of state dirigism, we need the right framework conditions: Fast approval procedures, the removal of bureaucratic hurdles, tax incentives and market-based instruments will bring more progress to climate protection than bans and appeals for renunciation.
We can grow in a climate-neutral way if we do it right. We have to combine economy and ecology with creative innovations and technological progress. It’s about increasing our competitiveness and creating jobs. At the same time, however, we have to protect the planet, increase social prosperity and socially cushion the burdens associated with change.
An important step on this path will be to decouple growth and raw material consumption across the entire value chain. In other words: achieving more with fewer resources. The goals of the Paris Climate Agreement are clear. This includes halving greenhouse gas emissions by 2030 and climate neutrality by 2050 so that the temperature rise can be limited to 1.5 degrees.
This will require innovations for green technologies over the next ten years. Companies are ready to actively drive change. So does Henkel. Together we set ambitious climate goals and have the resources, knowledge, experience, size and market position to implement them. The industry stands by its responsibility and develops concrete solutions for a climate-neutral future. Whether regenerative energies, emission-free heat supply or the networking of energy efficiency and digitization: Climate protection measures are also an opportunity and an incentive for new growth.
Open up new sustainability markets
Already today, low-carbon technologies can help to improve the environmental balance and increase cost efficiency, in industry as well as in construction and transport. A functioning circular economy protects resources and reduces the amount of waste. Sustainable products and business models are already opening up new markets in both industrialized and emerging countries.
Environmentally conscious management also increases the opportunities on the financial market. Investors are increasingly looking at the carbon footprint: According to a survey by Union Investment, a good 70 percent of all institutional investors now consider sustainability criteria in their investment decisions. This shows the relevance that sustainable investments now have.
Innovative future technologies and resource-saving processes are becoming more and more important. This also creates new forms of collaboration. Many large corporations, including Henkel, enter into strategic alliances with younger or established companies that have a high level of sustainability expertise. This enables promising concepts to be picked up and implemented quickly.
Many ideas with great potential do not have to be invented first, they already exist. In 2021, the proportion of green start-ups was already 30 percent of all young companies in Germany. Investments in green start-ups are also increasing, a trend that will intensify in the future and make the start-up scene an important economic factor. Here Germany has the chance to secure a leading position worldwide.
Greenwashing won’t work
The current political climate strengthens the trend towards sustainable transformation. Under President Joe Biden, the United States has rejoined the Paris Agreement, announced new climate targets and is planning substantial investments in sustainable technologies and climate protection. The EU has also raised its climate targets. And growth and climate protection are also right at the top of the agenda for the future German government. These are important, partly overdue steps in the right direction.
We are in the middle of a profound upheaval. Companies that focus on sustainability and holistic growth will have competitive advantages. But one thing is clear: “Greenwashing” will not work. It’s about the right posture and the right actions. At Henkel, we have set ourselves clear goals by which we can be measured: We want to use 100 percent electricity from renewable sources in production by 2030 and be climate-positive by 2040, i.e. we want to transfer excess energy to third parties.
The next few years will determine whether we can rise to the global challenge of achieving more with fewer resources. If companies, politicians, scientists and consumers pull together, we will meet this challenge. I firmly believe that Germany can and will take a pioneering role in international competition. But we must not lose any more time and must act today for tomorrow.
We have to set the right course for a successful future – in Germany, Europe and worldwide.
The author: Carsten Knobel is the CEO of the Henkel Group.
More: How different countries are transforming their economies.