José Luis Blasco, Global Head of Sustainability at Acciona, and Professor Concepción Galdón, Director of the IE Center for Social Innovation and Sustainability, discuss the steps organizations and individuals can take to push the transition toward a sustainable economy. Part 1 of the interview.

Business, People, and the Transition to Sustainability with José Luis Blasco and Concepción Galdón. With kind acknowledgements to IE Insights. Scroll down to watch the full interview in Spanish – with subtitles available in English – on the IE Insights website, or click here.

Concepción Galdón: My name is Concepción Galdón – I’m the Director of the IE Center for Social Innovation and Sustainability. Inside the IE Sustainability Office, I also run all the academic side, the research and sustainability content of our programs.

José Luis Blasco: My name is José Luis Blasco, I am the Global Head of Sustainability at Acciona, an infrastructure and energy company with many international operations.

CG: Well, thank you very much José Luis for accepting our invitation to talk about sustainability today. The first thing I would like to ask you, just to get the ball rolling, is what has happened to us with the whole idea of sustainability over the last few years? Because unfortunately, poverty is not something we have just invented.

The first articles in scientific journals on climate change were published 50 years ago. Inequality, unfortunately, is also older than the hills. These problems of biodiversity, of managing resources, have been piling up for decades and yet, there is still no social catharsis about looking at these concepts from another angle, with another responsibility. What do you think has happened?

JLB: Before the pandemic, we had already reached a point where we had the feeling that the market economy, which had brought such amazing results, we have had 30 or 40 years of incredible growth. We have taken 300 to 400 million people out of poverty. We have tried to develop technologically and to bring welfare to more and more people, but it was a system that, to a certain extent, we all knew had gone off the rails.

We had seen how climate change was starting to become an emergency. There was a kind of consensus on the need, not only for the public sector, but also for the private sector and the general public to be part of a new way of thinking. And I think that the pandemic has speeded this process up. I think for me there are two main ingredients that have catalyzed this change.

Discontent is one. People were angry, we have seen numerous protests, not only the yellow jackets in France, we have seen others in Chile, in Lebanon. In Colombia people were talking about the right to be angry. I have the right to be angry and to be out here on the streets showing people how angry I am. That situation has given us a different wakeup call. We’re also going to see where they’re going, where things are heading. But I think that the major trigger, which first made boards of directors, but also parliaments, make a move was the climate emergency.

I think it has made everybody more aware of the fact that we have a very short amount of time to react to a problem that can inexorably transform our relationship with the planet and, therefore, our development model. We need to rebuild the derailed train in a different way, to make it work for the people and for the planet.

Capitalism is a very important tool to create welfare – we need to make it move forward during the transition

CG: Some people have turned capitalism into a cult, as something that they have to protect. But, on many occasions, the best way to protect something is to help it move forward. When it moved forward in the 1960s, it was a time that coincided with the change, the exceptional growth of the economy, which is absolutely compatible.

When the economy starts to grow and the middle classes emerge and they start to demand that the economy should work differently. And this actually happened and this coincided with the first time that mankind was able to disconnect economic growth from its primary source of energy, which was people, and we can see this in the statistics. So, it was a time that we saw as being special, but it wasn’t that special. We have already had a period in history when we changed capitalism to a better version at the time, which was also thanks to the transition, through the economy and through innovation, to new energy sources, and that should not scare us. Totally the opposite, it is very exciting and it goes hand in hand with a part, I think, that is more humanist, more people-centered, of a certain pride in participating.

JLB: This is a time when those who will succeed in the year, I mean, in the 21st century, will be those who are capable of understanding that the world is more complex, that we can optimize more than one income statement, that this complexity is going to give us new prosperity. I believe that this new capitalism, let’s call it that, I think there is a different understanding of what the elements to be optimized are from a public or private standpoint. In this new capitalism, we are going to be able not only to survive, which is the feeling we often have, in order to renew.

CG: In fact, I often feel that we have been really efficient and quick in getting to a place we don’t really want to be in. We have to change direction. It’s not just that we’re not going downhill extremely fast, it’s that we have to change the direction we’ve been going in completely. Which is what you were talking about in terms of renewal and I think we also have to connect with the world of ideas, of thought, of philosophy, of valuable things, because our idea was to separate the economy as a science from the reality of the societies in which it operates.

And the fact is that economics is a social science and often we make mistakes when we want to dice up situations, instead of tackling a world that is complex, that does not fit in a double-entry matrix, and where we have abandoned things along the way. How we have looked the other way, when there are many realities which we needed to factor in and I do sincerely believe that capitalism is a very important tool to create welfare and I believe that because of its importance, we need to make it move forward.

JLB: There is also a great opportunity from the point of view of innovation and business. Let’s not forget that this has nothing to do with the downturn, it has nothing to do with, let’s say, with being worse off. We are talking about an approximate investment required solely for the climate, to achieve that net-zero that we need by the middle of the century to be able to not consume that meagre carbon budget that we have left, so we’re talking about trillions, we are talking about 3.7 trillion in investment in areas such as, not only energy, and not only transport and large scale industry, but we are talking about a huge opportunity to re-industrialize our continent.

And I think that Europe has decided that this model of a different capitalism, brings a competitive advantage in a new world. But let’s not forget, I think there are also some major threats in this transition. The main threat is to understand that our development model cannot be dominant, cannot conquer the entire planet, we are not always totally right. We must work on opening up, on being permeable, on interconnecting, because otherwise we will end up leaving out people who think that this world has to be transformed in different ways. And I’m very concerned that things that we take for granted, which in the market economy development model are essential, are the operating system, need to be shared by other cultures.

Transition: Historical changes do not happen on a particular day

CG: When a change takes place in a period of history, then historians choose a date, whatever it may be, to say it was the day of this war or it was the day of such and such. But, actually, historical changes do not happen on a particular day, they have been going on for decades and they are consolidated over decades. And I believe that, in the future, we will realize that we have been involved in a historical change, which I don’t know whether historians will say that the change was confirmed when the war in Ukraine broke out, or during the pandemic, or what day they will say marked the change, but I know that we are a part of this. We have to look at new ways of building our value chains, new ways of functioning that enable us to be profitable, because we are sustainable.

JLB: When we talk about 2015, I am referring to this year because it was a time in which several things came together. First of all, perhaps we actually became aware of the reality of climate change and the climate emergency, with the Paris Agreement, which gave us a clear sign that the future is going to be carbon-free. But there is a second milestone that seems to me very relevant, which is a political fact, which is the creation of the 2030 Agenda, the Sustainable Development Goals.

We are going to work on the links and the trade-offs between, for example, water, food, and energy. Or we’re going to talk at some point about how social inclusion will be a key element when it comes to thinking about this new future, about the 21st century. And the complexity of having to link these different challenges, I think that’s going to be where we are going to have winners and losers, winners and losers from the point of view of the companies that are able to read this context, this change and also from the point of view of people, of how we adapt.

CG: We can actually do a foresight exercise of trying to pinpoint things that are already happening now and that are like little windows opening onto the future. And I see it in many industries. For example, in the fashion industry, when we talk about sustainable fashion it’s almost like a contradiction in terms, but we are starting to see companies that are starting to think about fashion not in terms of collections and convincing you that what is good for you today isn’t good for you tomorrow, where you end up buying and throwing away, and buying and throwing away.

But to start thinking about clothes as timeless collections, pieces that you can wear forever that are made differently, with totally different technologies, not like before when jeans were stonewashed in incredibly harmful ways, both from a social and environmental standpoint. Now they use technology which consumes 1% of that amount of water, does the same job, and also creates a totally different relationship with those pants or whatever it is, which lasts over time.

Why can’t roads produce energy?

JLB: We’re seeing new business models. For example, in the field of cars, tires, automobiles, which means that I want to move around or I want to own a car and how I relate to that, and companies learning how to make money from their assets in a different way. I think we are going to have new models in which people are going to be more like managers, more active players in this service, and are going to have more to say about them, about ourselves. And we’re going to be able to contribute in that relationship. I believe that at some point in time consumers are going to become prosumers in that they participate in the efficiency of the product or service.

We are very passive. This point is really important because it will transform many industries. We’ve talked about, you mentioned the case of fashion and of mobility, but let’s look at one of the most important when it comes to transformation, for example, food agriculture. We are talking about an industry that emits approximately 20% of greenhouse gas emissions with some clearly defined structural elements, which, in the case of infrastructure, is especially important. The productivity ratios of an industry which is so essential for the economy, as is the construction of infrastructure, instead of increasing, simply remain stable or are decreasing. In the end, infrastructure has two characteristics that make it unique.

The first is that, to a certain extent, it is a society’s operating system. What we do now, what we build now, the way we develop our water supply, energy and mobility, is going to last for 100 years, it’s going to last over time. And in 2050, those assets have to be completely decarbonized, if they are to be compatible and be valuable. But, on the other hand, infrastructure’s ability to transform from the point of view of renewal is extremely important. We ask ourselves in daily examples, well, why can’t roads produce energy? For example, storing water for irrigation or transforming the land.

Useful links:

• Watch the full interview in Spanish – with subtitles available in English – on the IE Insights website
• Link up with José Luis Blasco and Concepción Galdón on LinkedIn
• Read a related article: Inclusive growth and the B4IG initiative
• Discover IE Business School
• Apply for the IE online MBA or EMBA.

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