Two Perspectives on the EIB Investment Report 2019/2020

Short list of findings:

  • Economic climate in the EU is worsening and investment by EU firms is likely to slow down in 2020
  • EU climate mitigation investment stagnating and behind US and China
  • Europe needs to accelerate adoption of digital technologies to stay competitive

European firms are becoming increasingly pessimistic about the economic outlook according to the new EIB Investment Report 2019/2020. The report also finds that investment in climate change mitigation is lower than that of major economies like the US and China. Infrastructure investment is stuck at 1.6% of EU GDP, the lowest in 15 years and Europe is failing to reap the benefits of digital transformation.

Original article entitled EIB Investment Report 2019: Uncertainty Weighing on EU Firm Investment; Published by EIB here on 26 November 2019

The report, which reflects the results of the annual EIB Investment Survey (EIBIS) of 12,500 European businesses, recommends that the EU take advantage of historically low interest rates, increase public investment, catalyse private investment and promote efficient financial intermediation to tackle the slowdown.

“Europe cannot afford to wait out another cyclical downturn. After a lost decade of weak investment, we need to tackle the slowdown now if we are to respond to the historic challenges we are facing. The EIB, as the EU’s financial arm and climate bank, has played a crucial role in kick-starting investment in Europe after the financial crisis and we now stand ready to further support investment for a more sustainable and competitive European economy.”

Commenting on the report’s findings, EIB Vice-President Andrew McDowell 

Read the executive summary

Read the country-level analyses

The report was presented at the EIB’s Annual Economic Conference, which is jointly organised with the OECD, Columbia University and SUERF, in Luxembourg. The conference brought together high-level speakers such Sir Nicholas Stern and Mariana Mazzucato and chief economists of the European Central Bank, European Stability Mechanism, OECD, European Bank for Reconstruction and Development and the World Trade Organisation.

“We have to accelerate investment to fully exploit the benefits of the digital revolution, realise our climate goals and rebuild Europe’s social cohesion. There is a long list of investments that require public intervention or a private sector that finds the right conditions to overcome uncertainty: firms’ digitalisation, innovation and business dynamism as well as smart delivery of infrastructure and public services, green innovation and energy efficiency, and e-government, e-learning and e-training.”  

According to Deborah Revoltella, Director of the EIB’s Economic Department, while presenting the report. [ . . . ]

EU climate investment not on track

The EIB Investment Report shows that, although substantial progress has been made, climate action investment in the EU is not yet on track. To achieve a net zero-carbon economy by 2050, the EU must raise total investment in its energy system and related infrastructure from 2% to 3% of GDP on average.

The European Union invested EUR 158 billion in climate change mitigation in 2018. At 1.2% of GDP, this is now marginally less than the United States (1.3%) and little over a third of China’s performance (3.3% of GDP).

While the United States leads in climate-related R&D spending, China has recently quadrupled its spending, overtaking the EU.

Europe’s weak performance in climate-related R&D is a threat to its competitiveness, given the importance that still-immature technologies will have in the transition.

To continue reading the original article, link here.

Another Perspective from ClientEarth foundation to the EIB 2019/2020 Report

Response to this report per the official News release from of 13 November 2019, entitled Major Step Forward: European Investment Bank to Stop Funding Fossil Fuel Projects, original publication here

ClientEarth welcomes the European Investment Bank’s landmark lending policy and the Board’s decision to exclude gas finance from it.

“The EIB has set the standard for banks worldwide with this move – and clearly signalled that oil, gas and  coal lending is inconsistent with the Paris Agreement goals. This is a major step in the flight of capital from fossil fuels. While we are disappointed to have seen such strong initial pushback from countries like Germany, which claims high standards on climate, the passing of this policy shows a change of gear for clean investment.”

ClientEarth lawyer Peter Barnett

Although the policy will kick in at the end of 2021, a year later than previously proposed, ClientEarth lawyers have warned that any decision to fund new gas or other fossil fuel projects before then would not be in line with the Paris Agreement and will risk legal challenge.

For further reading the original article by link here.

Evidence Transnational Campaigns on Human Rights Can Really Work

Originally published 20 August 2019 in Business & Human Rights Resource Centre; Author: Bama Athreya, Fellow at Open Society Foundations & an advisor to C&A Foundation

A recent study finds that global campaigns on labour rights work – but need continued support to bring about real change. 

Human rights advocates have worked across borders to pressure global corporations and others for many years – but it’s hard to measure results. Is there evidence that transnational campaigns actually work? I recently had the opportunity to work with USAID and a team of independent researchers to review the evidence and consider this question.

The report – led by Dr Marissa Brookes of U-C Riverside – focused on global labour campaigns targeting transnational companies and industries. Dr Brookes has been compiling a database on such campaigns for many years. In addition to summarizing the literature more generally, the review took an in-depth look at four campaigns, each in a very different country and focused on a very different industry.

The four cases were Raffles Hotel in CambodiaRussell Athletic in HondurasBridgestone-Firestone tire company in Liberia, and the cut flower industry in Colombia. Importantly, we were able to examine evidence about the long-term effects of these campaigns in the years since they were initiated.

We convened an experts’ discussion on July 24 to discuss the findings with leading advocates, academics and donors, including some who had been directly active in at least one of the four campaigns. We were even able to include Edwin Cisco, a Liberian labour leader who was one of the initiators of the Firestone/Liberia campaign. 

Top take-aways from this discussion, as follows, may be relevant for advocates everywhere:

All transnationalism is local. Local grassroots actors – representing workers and communities and their demands – must be at the centre of effective campaigns. Without a strong and legitimate local voice, there cannot be lasting change. For example, in Cambodia hotel workers have protected gains over many years because they were able to build power locally.  In contrast, in Colombia flower workers still struggle to maintain small wins.

But sometimes local is transnational. It used to be that campaigns feared companies would shift production to avoid organizing drives in a ‘race to the bottom’. But the new race to the bottom is not the movement of production, it’s the movement of workers. Increasingly, migrant workers are taking over industries with hard-fought gains, such as the Malaysian electronics sector. Therefore transnational organizing of migrants needs to be elevated, and campaigns need to span geographies and industries.

Success is not in what you can measure. While campaigners may have been looking for specific outcomes (such as winning a collective bargaining agreement, or a change in wages or benefits), in the long run the cases all revealed that success was broader and deeper than these immediate outcomes. Indeed, it may be the case that even where specific targets were not achieved, local activists saw gains through their participation in the campaigns.

Years after the Bridgestone/Firestone campaign had ended, Liberian labor leader Edwin Cisco was able to point out important long-term gains that had not been captured by the ‘evidence’. He could recall a time prior to the campaign when unions had no role in the country’s broader civic life. Today, he said, consultations with unions over relevant policy matters, while not always honored in practice, are expected to take place. This represents a subtle but profound shift in the power dynamics around labor unions far beyond campaign demands.

We need deep coalitions no matter what, but this means addressing new threats to civil society. It’s impossible to know when solidarity campaigns will be needed, but campaigns can only kick in if local actors have ongoing relationships with transnational networks and actors.  Those relationships can’t be built around one-off corporate campaigns. The civic ‘infrastructure’ has to be in place, and it has to be built on a fundamental shared vision regarding ‘rules of the game’ and worker empowerment that goes beyond corporate accountability.

Global trade union structures, while imperfect, provide some architecture for this. These structures need to become more inclusive of other civil society actors. And they need to take note of the changing environment for civil society globally, including the use of new forms of surveillance and disinformation. We all need to up our game on digital protection for unionists and rights advocates.

Donors: Don’t be discouraged! The evidence is real: These campaigns do make a difference in the long run. However, we need to be patient and be flexible in our consideration of what constitutes ‘results’. It’s hard to capture long-term shifts in power dynamics or movement cohesion in a logframe.

Link to further reading here.