Last Updated on Monday, 24 June, 2024 at 10:41 pm by Andre Camilleri
Last week I wrote about the EU election campaign and the hilarious moments attached to it. The day ensuing the election result I returned to work. I was eager to see my team and settle back to the realm of ESG. True, politics is quite interesting even though it is tough. However, I missed my job and the technicalities circling around the implementation of Climate and Environmental Risks.
Certainly, the Corporate Sustainability Reporting Directive is driving most of the banks and private companies berserk. The European Sustainable Reporting Standards are quite granular and arduous to execute. When I returned to my desk, I had to revise the methodologies and the processes attached to the directive. In a world where sustainability, primarily climate change seems to be a pressing risk for most of the financial institutions, as well as banks, the EU will certainly keep on pushing to implement such directives. Also, the European Central Bank is on the tail of all those involved under their supervision. Surely, we need to carry on with this momentum. Else, we are not going to achieve the established climate targets at an EU level.
The problem is not the way targets are being implemented by the private sectors but by EU governments. The pace with which targets are being executed are completely divergent and off track. Whereas private companies are accelerating the process to achieve sustainability targets and keep up with regulations and directives, EU governments are lacking behind. We need the same process that works in parallel and in the same direction. Otherwise, we are going to experience problems when it comes to market sentiment, investments and regulatory transitions. Some sectors are more prone to physical risks rather than transition risks. However, it is useless to have the private sector ahead of the public sector, as it is creating a barrier to many economic operators to transit to cleaner practices.
The European Parliament election campaign taught me that the majority of people are unhappy with the quality of life in Europe. The EU election results show that on mainland Europe the younger generation voted for fringe parties. Voting for fringe parties might be positively correlated to the negative economic sentiment on the ground. Additionally, we have a generation where they cannot stand traditional boring politicians any longer. I had the same feeling when I was younger and posted in Brussels.
Alas, I made this mistake in the campaign. I came across as another boring eurocrat. Well, the more authentic and the less technical you are the more they appreciate you. It is all about optics in politics. In fact, locally, labour lenient voters have had enough of our rhetoric. They wanted to send the same message. They told us, hey you are all mostly boring. My biggest mistake was to stop writing about what matters to people. I stopped writing about them in June 2023. Well, next year I will tell you why I stopped writing about them. For now, I will keep it to myself.
Certainly, it is time to change our political discourse. We need to start thinking differently. Now that the election campaign is over, I can say it freely. If we want to keep on increasing our pensions, carers’ grants and all the social benefits, there is only one way to solve our economic success problems, if we want to keep on expanding our economy. Malta must commission a study about building an offshore artificial island.
However, it must be built not for speculation but to expand the territory further outside and off the coast. The idea is to relocate most of the polluting sectors on it and to allow some breathing space to us. Also, if we think of building an underground system, most of the waste can easily be dumped there. We could then relocate most of our industrialised sectors, including those that are highly polluting there. This would allow mainland Malta to retain those high-quality sectors and the service industry. Most of the construction magnates would be given part of the cake offshore to make additional millions, while giving us a bit of a breathing space here.
Also, we need to start talking about solar rights, environmental rights and internalising the cost of the environment including property rights. It does not make sense anymore to allow the Planning Authority to issue permits where such building permits affect solar panel investments. We are going against climate change mitigation targets with less productive climate mitigation investments. There must be a compensation mechanism. Furthermore, we must start thinking of how to integrate the right to adequate green space in highly urbanised areas and tap into additional lending financial instruments to reduce the interest rate to provide for affordable housing.
The younger generation requires a solution to counter the spike in property prices. The government, along with other affordable housing foundations, must integrate the S of ESG. The only way to do it is through the guarantees either from the EU budget or other partnerships with distinctive development banks. The idea is to make credit cheaper on the market, which in turn regulates market prices by sending a countering price signal. And the cheaper lending would not be provided only because of the E of ESG but also because of the S.
Indeed, this could help counterbalance speculation and spikes in prices, while allowing the economy to expand and grow further. We require additional creative solutions, including the management of sites for campers, a recreational policy for those owning a piece of arable and non-arable land including small room used for recreational purposes and other policies that improve the quality of life of people. However, we must tread carefully and leave such implementation of policies to those who really know what they are doing.
Certainly, the Maltese government must stay away from issuing additional regulations and legal notices. Else, we are going to keep on adding bureaucracy. When the government issues legal notices, as well as regulations, we must accompany them with an operational plan. We must avoid hasty regulations to avoid fuelling ambiguity. We must not give any additional weapons to those who use a two-metre inch tape with the small and a five-centimetre yardstick with the big. At times they do it on purpose to upset people. Let’s keep on proposing polices that improve the quality of life of people.
