G20 Executive Talk Series

September 2016

Sustainability Agenda

Authored by: Peder Holk Nielsen

Moving the Global Climate and Sustainability Agenda Forward Through G20

As China assumed the G20 Presidency at the end of 2015, it did so shortly after an unprecedented set of international agreements on Climate Change (COP21), Sustainable Development Goals (SDGs) and Financing for Development (FfD) were reached.

Looking ahead, alongside finance and trade issues, all countries will increasingly look to underpin their economies whilst considering environmental, climate and development.

China has first-hand experience of this dynamic. In less than 30 years Chinese economic growth has improved the well-being of tens of millions of its citizens and transformed global trade and production. It is now driving economic reforms, with sustainable development key to its future success. It has already advanced a number of important strategies and pledged to reduce carbon emissions.

Similar actions are underway across G20 members, as they seek to outline their climate change and sustainable development1 contributions through national policies and investments.

Businesses are becoming ever more aware of and ever more engaged with this new reality. Companies are seeking to enhance operational efficiencies and value and supply chains; they are focusing more attention on the use of natural resources and environmental footprints and becoming ever more innovative.

Strong leadership, courage and determination are all essential if G20 and Business Leaders are to move a shared agenda forward. There are several areas where efforts to enhance the relationship between global policies on the one hand and business innovation on the other should be focused, if we are to achieve the best possible outcomes.

Firstly, G20 energy policies and investments must be central to overall climate efforts.

Across all types and forms of energy, combined global energy demand is expected to increase by a third by 2035, the majority from coal, oil and gas. With a global consensus on the need to address climate change, now is the time to accelerate the development and commercial-scale deployment of a range of sustainable energy and low carbon options.

For Business, energy is the largest focus area for infrastructure investment. To enable forward-looking investment in reliable, affordable and sustainable energy and the development of innovative solutions by the private sector, long-term, policy frameworks and support remains essential. This is particularly true for renewable energy, where technologies and projects can take many years to develop and implement.

Secondly, with global population expected to reach 9 billion by 2050, we will need to almost double current agricultural output.

Across all types and forms of energy, combined global energy demand is expected to increase by a third by 2035, the majority from coal, oil and gas.

Climate change impacts such as changing weather patterns will not make it easier to address this challenge, with farmers in developing and emerging economies among those most likely to be affected. We must rethink traditional value chains to help farmers increase crop yield, particularly in areas with marginal land to help enable farmers run economically viable businesses, increase food security and reduce poverty.

Traditionally, agriculture and energy are often considered separately and not very well linked, yet agriculture should be seen as a prerequisite for developing new value chains that can make efficient use of agricultural waste products. Facilitating a shift from conventional agricultural patterns to a new, balanced rural development would benefit energy and climate issues; this in turn would have a positive impact on the relationship between urban and rural areas in terms of growth and jobs.

Thirdly, annual consumption in emerging markets will rise significantly in the next decade. The way that products are both produced and consumed must become more sustainable – if only to cope with increased demand on natural resources.

For example, producing just one pair of denim jeans requires around 11,000 liters of water. Aside from growing societal interest in product sustainability, the vast majority of consumer goods such as textiles are produced in G20 countries, leading to a clear interest both at global and at national level to support growth whilst managing resources.

Lastly, combining trade and the environment can be mutually inclusive ways of driving a global sustainable development agenda.

In recent years the G20 and B20 have both highlighted and supported efforts to complete the latest round of WTO negotiations and encourage forward-thinking multilateral trade agenda. A timely conclusion of the Environmental Goods Agreement would help in removing barriers to trade in “green” goods, and would include for example the elimination of tariff and non-tariff barriers on energy and environmental goods and services.

Whilst delivering on its mandate to promote global economic growth and strengthen the world’s economy, as a forum for global governance and political leadership the G20 has a unique role to play in contributing to a more sustainable future.
G20 and Business leaders must seize this opportunity: Doing so will see growth and innovation support the use of the world’s resources for the benefit of humanity, the economy and the natural environment.

1 Sustainable Development is a term that generally encompasses issues related to addressing poverty
reduction, environmental protection, climate change and inclusiveness whilst balancing economic growth.

Peder Holk Nielsen became CEO Novozymes in April 2013, and has dedicated his career to industrial biotechnology. Since 1984, Peder has worked in many different parts of Novozymes, shaping the company as it is today and solidifying the market insight and research capabilities that will foster Novozymes of tomorrow. He has led a number of the company’s Divisions, from new business development, to R&D and Sales.

Peder holds a PhD and MSc in Chemical Engineering from the Technical University of Denmark and a B.Com. in International Business Management from Copenhagen Business School.