ETUC answer to the Reflection Paper Towards a Sustainable Europe 2030

ETUC answer to the Reflection Paper Towards a Sustainable Europe 2030

Adopted at the Executive Committee Meeting of 26-27 March 2019

Starting with Scenario 2, swiftly moving toward Scenario 1

On 30 January 2019, the European Commission issued a Reflection Paper Towards a Sustainable Europe 2030. It includes three scenarios which the Strategic Agenda 2019-2024 of the EU will be built upon[1].

The ETUC remains convinced that the EU should be given the opportunity to develop and implement an overarching strategy for development in implementing the Agenda 2030 as envisaged in Scenario 1. However, the ETUC considers that in current situation scenario 2 is the one that fits best as without the engagement of Member States and without sufficient levels of convergence, it is not possible to move progressively to scenario 1.

National governments hold the main responsibility for progress toward the SDGs. The bulk of policy competences under the UN2030 Agenda remains in the exclusive or shared competence of Member States. Scenario 1 today carries the risk that national governments could feel relieved of their responsibilities. Once an advanced level of convergence is achieved, thanks to strong coordination of policies at EU level, firm progress can be made towards ultimate attainment of all SDGs. To strengthen the scenario 2, the EU should be clear and concrete on how the "mainstreaming of the SDG's in all relevant EU policies" will take place and how such mainstreaming will be monitored.

Putting Goal 16 at the centre of the EU’s integration process will strengthen the European development model. The Union's aim is to promote peace, its values and the well-being of its peoples. There are many common objectives in Goal 16 and in the Treaty on European Union. Member States join the Union sharing the same attachment to the principles of liberty, democracy and respect for human rights and fundamental freedoms and for the rule of law. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail.

The ETUC is convinced that the main condition to make a success of the SDG’s in the context of protecting human and labour rights, is that they are being carried out with proper due diligence. Guidance can be found in the voluntary OECD Guidelines for MNE’s and in the UN Guiding Principles for Business and Human Rights. Identifying beforehand the main, salient risks that concern human and labour rights guarantee that no harm is being done while doing good.

The ETUC priorities are those set out in the ETUC Resolution for a Sustainable Europe by 2030 which is an integral part of this document (attached herewith).

ETUC Comments on the Reflection Paper

This document provides some comments on the views the European Commission puts forward in the Reflection Paper Towards a Sustainable Europe 2030. It adds some views on the role of private and public actors in financing SDGs as discussed in the Ad Hoc Group of the ETUC in January 2019. The ETUC analysis covers the Report on the Reflection Paper Towards a Sustainable Europe by 2030 issued in September 2030 by the SDG Multi-Stakeholder Platform (attached to the Reflection Paper of the European Commission).

The Reflection Paper focuses on what the EU has achieved during the legislative period 2014-2019. The 3 scenarios are sketchily described making it difficult to understand what the actual implications of the three are. The overall analysis seems over-optimistic and maintains a biased approach to structural reforms. It is disappointing when it downgrades SDGs to a map to follow for future policy and do not consider it as an overarching visionary and transformative Sustainable Europe 2030 strategy, guiding all policies and programmes.

In particular, the Reflection Paper does not contain all the elements needed to put workers and Goal 8 at the centre of the EU development model. Placing the issue of “right social transition” at the end of the document doesn’t give to people and workers the primacy they should have. Full employment, quality jobs and well-protected workers are the balance around which the different dimensions of sustainable Europe can be built upon. Social protection does not appear to be the priority of the Commission in its approach to a sustainable Europe. It is regrettable that the Paper only constitutes a broad roadmap with no specifics or real strength.

The ETUC recalls that sustainability starts from more quality, right-based employment in undertakings of all sizes. Welfare, collective bargaining and employee participation are three components of a development model able to stop pollution, preserve biodiversity and open new opportunities for companies and investors in sustainable products and markets. It is therefore crucial that due diligence will be added to the EU policy while working on the SDG’s.

The Reflection Paper does not explain that the levels of poverty and inequalities in the EU have been driven by wrong policy decisions made during and after the crisis. It does not refer to the fact that austerity measures and weakening of collective bargaining are the root of poor performances in real wages are at the origin of poverty, exclusion and people’s unmet needs. It does not correctly identify shortages in labour markets and conditions for specific groups like young workers, women or migrants, whose working and living conditions remain below pre-crisis levels in most EU countries. It does not explain that weakening collective bargaining has inhibited, for an entire decade, the achievement of new rights that, for instance, technological progress may require.

The ETUC was expecting more focus on the Skills Agenda, especially on the access to vocational training and lifelong learning to prepare the workforce for the future of work. It is not clearly stated how the European Pillar of Social Rights will impact on the implementation of SDG Goal 4 by focusing on providing people with the right to high quality and inclusive education. Accesso to quality education and vocational training is a pillar of the “just transition” concept. The Reflection Paper does not address all aspects needed for just transitions to ensure that workers are fully protected in rapidly changing labour markets.  

In some regards, the approach to the future of work is biased. The Reflection Paper highlights the opportunities but does not point out the risks. Frictions in the labour market induced by digitalisation and new technologies are described as temporary but the Reflection Paper overlooks risks of entrenching discrimination and exclusion. Technological progress and Artificial Intelligence (AI) will have positive effects on people’s work and living standards but new ethical frameworks and enforceable rules are still needed. Building new ethics may not be enough. AI may heavily impact on democracy and societal patterns and new legislative frameworks with enforceable rules and laws cannot be replaced by unenforceable ethical codes, guidelines, self-regulation or voluntary self-commitments.

Transitions to green and decarbonised production are already affecting large parts of the workforce and lack of adequate protection for workers is creating inequalities both among workers (protections and opportunities) and in the pace with which countries are modernising their productive fabric. If workers’ opinions and need for secure jobs are not heard when planning the EU strategy for sustainable development, the UN Paris Agreement will not be seriously taken on board.

The Commission document mentions public services as an important stakeholder in SDG implementation.  However, it does not mention how many public services and the whole public sector were badly affected by governmental fiscal constraints (frozen salaries, mass dismissals etc.). Europe needs more public spending. The EU and Member States must invest more in education, science, healthcare, social and cultural sectors. The lack of labour is recurrent in these sectors, while young workers do not find opportunities. The ETUC and the national confederations demand effective social dialogue in the public sector because SDG implementation needs strong public services.

It should be specified that it is up to Member States to make an evidence-based analysis of labour market. On this basis, they should build a strategy for active labour market and integration policies including decisions on infrastructure, housing, schools and a satisfactory solution on budgetary issues as well as sustainable migration policies with legal channels for migrants, fair and common conditions for access and employment in Europe. Swift integration of people with international protection into the labour market as demanded by the EU Partnership for Integration and following the lessons of the Labour-Int project actions are good guides to follow. The ETUC calls for a holistic approach to minimise the adverse drivers and structural factors of migration through fair and more effective cooperation with the countries of origin.

Wage and social dumping are widespread across most of Europe, showing even a dramatic increase in some regions. The principle of equal pay for equal work in the same place as a fundamental right of workers still has not been enforced in practice. The implementation of SDG8 will be seriously jeopardised if these issues are not addressed when mapping out the EU strategy.

On Financing of SDGs: Role of Private and Public Sector

First of all, SDGs pursue objectives that promote the direct interests of people. As recent studies have shown, public resources are key to leading the world toward the SDGs. In particular, there are economically important areas that guarantee quality of democracy and dignity of life, such as access to healthcare, access to justice, access to public water, access to education, universal coverage of fundamental social protection floors or safety nets for people in need, security and defence. Freedom of association and collective bargaining are also fundamental rights that are neglected in may part of the world and should be addressed in all EU SDG activities.

Health, education and schooling, and infrastructures such as water supply need public resources to be available. In certain areas, private and blending financing present high risks that people may not be ready to accept. Excessive confidence is placed in guarantees and combining, even though these modalities (e.g. largely used in the European Fund for Sustainable Development) have not yet been fully evaluated. Moreover, the budget allocation for blending financing lacks clarity, as well as strong accountability mechanisms to ensure effectiveness and coherence with SDGs. We should be careful to ensure that private capital does not replace public resources for public services or services of general interest.

Public finances should be organised in such a way that both tax income and public expenditure are SDGs-driven. It means that politicians have the arduous task of managing the complexity of sustainable development for which the SDGs offer a unique matrix to read, construe and harness world evolutions. In this era of populism and oversimplification of the political narrative, it may appear an overwhelming challenge. But it is the only way ahead. Only open, transparent and inclusive decision-making processes can create national budgets that finance SDGs at national level.

The EU budget can still become a way to finance SDGs including a system of governance and a map to permanently prioritise SDGs-driven expenditure, support a permanent dialogue with civil society and social partners, and use a reporting strategy that, year-by-year, records advances and announces upcoming progress and, if any, strategic updates.

The EU Multi-stakeholder Platform on SDGs provided some clear criteria that can be included in EU legislation to ensure that the MFF is fully adapted to SDG implementation in Europe: a. Embedding a “think sustainability first” principle by inter alia adjusting the Better Regulation Guidelines to have an improved assessment already in the next MFF.  b. Adjusting “ex ante conditionalities” to sustainability and to other funding lines of the MFF post-2020. c. Introducing a definition of “EU added value” that refers to SDGs linking up with the Treaty.  d. Reinforcing the “rule of law” in Member States by relating regular assessment and conditionalities to the suspension of EU funds. e. “Benchmarking” or earmarking funds to achieve specific sustainability objectives by setting binding expenditure targets for climate, biodiversity or social inclusion and ensuring that the money is administered by the competent authorities. f. Adding “SDG indicators” to allocation criteria of EU structural and investment funds. g. Because the EU Semester will be used to ensure policy coherence between the MFF and country specific recommendations, the EU Semester should be bound to respect for SDGS and adopting grids of analysis and policy recommendations that are SDG-based.

SDGs need a full engagement of the private sector. Business serves an essential role as a source of finance, as a driver of innovation and technological development and as a key engine of economic growth and employment. The private sector should endorse the SDGs together with OECD Guidelines and UN Guiding Principles on Business and Human Rights as a matrix that applies directly to the vision and strategy for doing business. In such a matrix, respect for human rights and rights at work should be prominent, and in synergy with environmental constraints. Businesses must think sustainable. They should (re)design and produce goods and services that are fully consistent with the sustainability patterns.

Investors have huge responsibilities as they influence the way companies operate or are operated. Today, more than ever, those who manage people’s savings should be genuinely and transparently driven by sustainability factors. Embodying SDGs in strategies is a way to ensure solidity of saving plans and create conditions for sustainable investments. Money managed by pension funds is workers’ money. Pensions are not financial assets like all others, pensions are a guarantee of dignity for older people. SDGs must be fully mainstreamed in their investment strategies to ensure suitable returns and long-term vision. In this regard, affordable tools and guidance should be provided to all pension funds, regardless of their size, to offer them the same opportunities to align investment strategies to SDGs.

Employees participate in the financial market through other forms of saving, especially aimed at financing occupational welfare schemes (like health insurance, long-term care schemes, unemployment benefits) and through participating in company equities, participating in occupational or company-based saving schemes and directing thereto money earned through performance-related compensation, awards or bonuses, which would normally top up wages. Employees’ voices do not always have the same weight in proportion to the stake they have in the economy. This leads to a democratic gap in the economy. Investors and companies should be ready for dialogue and adopt open governance patterns. In particular, corporations should reinforce their employee involvement structures. Social dialogue, collective bargaining and participation are instruments to bind companies and investors to SDG-based strategies.

International instruments help business with standards they should apply such as the Global Compact, the OECD Guidelines, UN Guiding Principles on Business and Human Rights, the ILO Standards, and climate agreements. Standards also include reporting, such as the Global Report Initiative (GRI). In particular, GRI standards and indexes are largely used by multinational companies. These instruments within the SDG architecture introduce rules to be respected, checks and balance procedures, countermeasures to discourage free riders, actions to persuade stakeholders to comply, remedies against infringers.  Practices like the TUDCN matrix aimed at forcing donors, investors and multinational companies to adopt standards when they want to gain credentials as development operators, should be multiplied. Soft law, standards, and guidelines should not replace actual enforceable legislation but reinforce the rule of law.

Companies should be bound to design and evaluate the results of development interventions, related to business conduct, records of social dialogue, transparency and disclosure, risk distribution and mitigation and SDGs engagement. In particular, the private sector must adhere to the SDGs and to key responsible business conduct instruments and must have a policy on disclosure of data in place.

The ETUC proposals for a sustainable Europe by 2030 are in its Resolution adopted in June 2018. The text below is an integral part of the ETUC answer to the European Commission Reflection Paper Toward a Sustainable Europe 2030. 

[1] The three scenarios are: 1. An overarching EU SDG strategy to guide all the actions of the EU and its Member States; 2. Continued mainstreaming of the SDGs in all relevant EU policies by the Commission, but not enforcing Member States’ action; 3. Putting enhanced focus on external action while consolidating current sustainability ambition at EU level.

 Annex: ETUC Resolution: Trade Unions for A Sustainable Europe by 2030 (Adopted by the Executive Committee of the ETUC in 25-26 June 2018)