By Hacina Py, Chief Sustainability Officer, Societe Generale Group
We have always needed narratives, collective narratives, to explain the world around us, project ourselves into the future and act. They serve as a fundamental way to make sense of the world, communicate ideas, pass on knowledge and connect with one another emotionally. Narratives provide context, meaning and structure to our experiences, helping us understand complex concepts, explore different perspectives and navigate the uncertainties of life. They shape our beliefs and values, fostering understanding and a sense of belonging.
Several scenarios aim for carbon neutrality by 2050. The International Energy Agency (IEA) has drawn up a scenario that would make it possible to aim for carbon neutrality on a global scale—i.e., a scenario in which we do not emit more carbon dioxide (CO2) than the planet can capture in order to limit the average temperature rise to 1.5 degrees Celsius above preindustrial levels by the end of the century. This path cannot be feasible without profound changes in production patterns and equally important changes in consumption patterns. The economic, environmental and social challenges we face require us to rethink our modes of both production and consumption, and this should be accompanied by reinventing our collective narratives. These new narratives will serve as blueprints for a low-carbon economy, allowing us to imagine a sustainable world and associate it with new, desirable representations.
Undeniably, some progress has been made, and efforts are underway towards adopting decarbonization and circular-economy practices at both individual and collective levels by public authorities, large economic players and citizens. Significant barriers to this necessarily more profound transformation still exist, with, of course,some reluctance to embrace these changes. These resistances are due to a variety of factors, including the fear of the unknown, costs of new production processes, cost-of-living worries, skepticism about feasibility, concerns about alternative ways of living, lack of awareness or understanding, insufficient incentives or regulations and competitive pressures. Companies are concerned about initial profitability and market losses before their business models become both sustainable and profitable, while individuals may worry about potential sacrifices in comfort or convenience.
There is, however, also a bright side for companies in this new paradigm. In a finite world with finite resources, we are invited to reconsider the linear system in which we extract resources to make products with often short lifespans that we use briefly before throwing away. Economies need to move towards more circular economies, in which production and consumption patterns are based on an approach whereby resources are used efficiently, products are eco-designed to be repaired, and waste is minimized. The circular economy offers businesses cost savings, innovation opportunities and resilience and will soon be key to enhancing their chances of winning calls for tenders. By reducing waste, maximizing resource efficiency and fostering collaboration across value chains, companies can gain competitive advantages. Companies that incorporate sustainable practices will be more resilient and, therefore, economically viable in the face of transition risks and resource depletion.
There are also many positives for citizens, provided we reset some fundamentals. We need to invent new, shared imaginaries to positively promote the shift to more sobriety (refocusing on what is necessary and avoiding waste), more sharing and cooperation (including between various generations) and usage rather than ownership. The ecological transition towards an economy compatible with planetary boundaries requires a profound transformation, which implies questioning the way we travel, live, eat, produce and consume. But this is not necessarily a bad move. The aim is to rethink urban planning and mobility to promote sharing amongst users, alternative transportation methods and meeting points between several modes of transport in a seamless way. New ways of living can be invented, with more shared spaces (extra room when entertaining, shared gardens, etc.), helping to reduce capex (capital expenditure) investment. This also means experimenting with more local agriculture and encouraging changes in our diet, which can positively impact health. The circular economy is also a key lever in providing individuals with durable products, financial savings and reduced ecological footprints. Reusing, recycling and responsible consumption improve the quality of life and preserve the environment. Needless to say, their benefits also extend to inclusion by recreating the links between generations.
One can, of course, have a pessimistic understanding of these transformations, identifying sobriety as a renunciation and sharing as giving up freedom. This is due to the “human factor”: our consumption culture and unconscious belief that success and happiness are linked to what we possess—a collective imagination that has been nurtured by decades of marketing and advertising. Basically, we enjoy purchasing things we do not need with money we do not have to impress people who do not care. Deconstructing decades-old narratives requires a good understanding of different human sciences. This is why the IPBC (International Panel on Behavior Change) was created (like the IPCC [Intergovernmental Panel on Climate Change] for climate, but with the mandate of analyzing scientific works on behavior). So, let’s stay tuned to their work, as human sciences will be key to moving ahead on this matter!
It is fair to say that traditional narratives often focus on doom and gloom, emphasizing the catastrophic consequences if we fail to act. While this approach can raise awareness, it can also lead to feelings of being overwhelmed, which hinders action. A new narrative can shift the focus to solutions and empowerment. For example, instead of just highlighting the negative impacts of carbon emissions, the narrative can emphasize the potential for renewable energy to create jobs and opportunities for entrepreneurs, boost economies and improve public health. By framing climate action as an opportunity for innovation and progress, this narrative can inspire individuals, communities and governments to take meaningful steps towards sustainability. By crafting narratives that highlight possibilities and empower individuals to take action, we can foster a more optimistic and proactive approach to addressing global challenges, such as climate change.
To address these challenges and facilitate the transition to a sustainable future, it is essential to craft new narratives—narratives that inspire and empower individuals to see the possibilities inherent in a decarbonized world. These narratives are there to demonstrate that it is not only possible to thrive in a society that prioritizes environmental stewardship and sustainable practices, but it is also desirable. They should showcase examples of individuals, businesses and communities that have successfully embraced sustainability without sacrificing economic viability or quality of life.
So, how do we imagine 2050 and the path to a low-carbon economy?
As financial institutions, new narratives should guide us towards innovative financial solutions that can facilitate meaningful changes. The first step is to become aware of this new paradigm and what it can represent by considering the positive aspects and not just the renunciations. To bring about this type of reflection, we at Societe Generale had the pleasure of hosting a very successful conference at the bank on the theme “Imagining 2050”. There are several podcasts on this prospective topic, including the 2050 Investors podcast of Societe Generale’s economic, cross-asset and quantitative research—an investigation into tomorrow’s economic mega-trends ahead of 2050’s global sustainability targets.
To help us visualize these new models and act accordingly, the French Agency for Ecological Transition (ADEME) has established four forward-looking scenarios aiming for carbon neutrality by 2050—from “frugal generation” to “regional cooperation”, “green technologies” and “restoration gamble”. These consistent standard paths, developed in a deliberately contrasting manner, present various economic, technical and societal options to achieve the 2050 objective. Although they are based on the same macroeconomic, demographic and climatic data, they all lead to carbon neutrality for the country via different routes and correspond to different societal choices that need to be made quickly.
We also sponsored an in-depth research project by the French association Entreprises pour l’Environment (EpE) on new narratives to take us through the changes in habits that will occur gradually until 2030, creating concrete stories in our daily lives. This acculturation phase is key to raising awareness and kickstarting business innovation. In our case, we asked our teams throughout the bank to revisit their mandates and ascertain how to adapt in order to contribute to the financing of the transition and enable their clients’ shifts.
I am convinced that our ability to imagine and share new narratives is a powerful force for positive change, as we need a joint roadmap to build a better and sustainable future together. By integrating these narratives into our collective consciousness, we can chart a course towards a more sustainable and equitable future. Let us continue to embrace these inspiring narratives, harnessing their potential to guide our actions and shape the world we wish to inhabit. It’s up to us to make these stories a reality, notably by inventing banking solutions that facilitate the adoption of sustainable practices.
Michael J. Hsu – Office of the Comptroller of the Currency
Vera Daves de Sousa – Ministry of Finance of Angola
Yazeed A. Alnafjan – Saudi Central Bank (SAMA)
Hacina Py – Societe Generale Group
Francesco Di Salvo – World Bank
Simon Paris – Finastra
Owen Young – Standard Chartered
Steve Morgan – Pegasystems
Indranil Pan – YES Bank
William C. Handorf – George Washington University
Sanjay Sharma – University of Southern California
Zhiguo He – Stanford University
Sheila Jiang – University of Florida
Douglas Xu – University of Florida
Paul P. Schaus – CCG Catalyst
Juan Pablo Córdoba – nuam exchange
Nicolas Charnay – S&P Global Ratings
Mehdi El Mrabet – S&P Global Ratings
Anish Ailawadi – Acuity Knowledge Partners
Adam Hammond – IBM
Kat Kravtsov – PwC
Alessio Mazzanti – Latam Investment Banking LLC
Keith Berry – Moody’s
Chris Spedding – PA Consulting
Marcel van der Schenk – PA Consulting
Teresa Cameron – Clear Junction
Simon Treacy – Linklaters
Charles Roberts – Fine & Country Portugal
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