Thought leadership – the case for dialogue Beyond immediate policymaking, companies should also engage in regular dialogue with political leaders in Brussels and elsewhere about their longer term vision for business and its contribution to society’s major challenges.
Companies such as Alstom, Shell and Vattenfall, for example, realized a few years ago that carbon capture and storage could facilitate the environmentally friendly use of coal. This would address both climate change and security of supply concerns, and open up a new business opportunity. Their leaders engaged the Commission and other EU institutions, NGOs and industry bodies, using exhibitions and visits to showcase their new technology. This approach encouraged the EU to support carbon capture and storage in power generation with a legislative framework that delivered returns through realistic pricing and direct financial support of more than €1bn. The result could be new opportunities for the transport and storage of CO2, the revival of a dying coal industry and a significant reduction in the release of greenhouse gases into the atmosphere. In short, a win for everyone.
The approach to EU engagement employed with technology also applies to revolutionary business models. Almost 20 years ago a few then unsung business leaders outlined their vision for a low-cost airline sector that would directly benefit consumers and speed up European integration. At the time, with no more than ten aircraft between them, Ryanair and easyJet did not seem to be destined to become market leaders. But partly because these companies were able to convince decision makers that change would not mean job losses or lax security, the necessary regulatory measures were introduced. The rest is history.
Two-way dialogue with the European Commission, meanwhile, including threats by the latter to name and shame offenders, has convinced the food industry to adopt new product recipes (reducing salt, fat and sugar content), to endorse a much more efficient system of labeling – Guideline Daily Amounts – and to better communicate the benefits of a healthy diet. Those companies that understood the direction of policy were able to steal a march on their rivals. McDonald’s, for example, remains the largest seller of hamburgers in the world, but is now also one of the leading distributors of fruit and salads thanks to the inclusion of these products on its menu.
The current regulatory agenda offers opportunities With elections in June 2009 bringing new faces to the European Parliament, and a new Commission due to take over in January 2010, new relationships are currently being forged in Brussels. But where are the new opportunities for business leaders to influence the wider social and economic debate?
The financial crisis has, of course, brought government back center stage into the economy. Even in member states as economically liberal as the United Kingdom, politicians are contemplating the possible rebirth of industrial policy, something that may also materialize at European level with a new Industry Commissioner. At the very least, European competition policy is likely to be questioned and may in future be more tolerant of state support for specific sectors.
As David Doyle explains on page 85, the EU will seek to take the lead in co-ordinating and regulating the financial sector, notably in banking supervision. The link between financial markets and the “real economy” will be a key point of focus for politicians who want to reassure voters that they control the risks posed by financial services activity and can also guide investment strategies toward areas that will have the biggest impact on European employment. Demographic realities in Europe will focus new attention on immigration and, most importantly, on pensions, where private sector solutions will be studied with particular interest.
Further initiatives can be expected in energy and climate policies as Europe seeks to diversify its sources of supply (an improvement in EU–Russia relations will be essential). The Copenhagen conference will set new global targets for fighting climate change and limiting greenhouse gas emissions. We expect that Europe will want to retain the lead on this issue and will therefore develop additional policies, for instance in the field of energy efficiency or on specific low-carbon technologies to further reduce emissions. A new European strategy on transport will be aimed at reducing the EU’s dependence on oil and improving infrastructure to tackle congestion.
Policies with a direct and immediate impact on European voters, such as consumer protection, product safety or labeling, will be high on the new Commission’s agenda. A more co-ordinated approach to healthcare has been underlined by global pandemics and rising healthcare costs.
Whatever the issues are that they may need to confront, those companies that involve themselves in discussions now will have the clearest idea of where tomorrow’s business opportunities are.