Top business leaders bemoan archaic systems in Europe that are curbing climate solutions

In order to drive the progress and development of innovative solutions that tackle climate change and help the environment, there needs to be regulatory frameworks in place that help companies make bolder steps forward, top industry CEOs told CNBC.

Ester Baiget, the CEO of biosolutions firm Novozymes, said that “roadblocks” usually stand in the way of companies producing sustainable solutions which needed to be removed.

“We need to work more with authorities to create the framework that we can move bolder … faster,” Baiget said on an “IOT: Powering the digital economy” panel moderated by CNBC’s Steve Sedgwick at this year’s World Economic Forum in Davos, Switzerland.

“We have a regulation which is based on the past,” she added, pointing out that in her own sector it can take six years to register a new microbe (or microorganism) to replace fertilizers, for example.

Microbes have been put forward as an alternative to reduce the use of chemical fertilizers, which contribute to greenhouse gas emissions. The runoff from these synthetic fertilizers can also cause damage to waterways. However, new microbial fertilizers need to go through regulatory approval before going to market.

Rethinking regulation

During the same panel discussion last week, Ilham Kadri, the CEO of chemical science company Syensqo, also highlighted the issues with current regulation around sustainability.

She said that “the road to carbon neutrality is long, is costly, is not easy. We need to rethink regulation in regions like Europe.”

Kadri also said there was a “lack of competitiveness in Europe,” referring to the difficulties faced by her sector.

One issue Kadri raised was the length of time it took to get permits for solutions developed across different countries. For example, she said that Synseqo has worked with French utility company Veolia, which operates in waste management, to use rubbish as an alternate fuel to coal.

However, she explained that with each of these solutions, the permit process could take two to three years: “Permitting is insane in Europe and in some other regions.”

“The problem is these regulatory environments [are] too complicated,” Kadri said. “The average tenure of a CEO is less than four years. So if you start year one and your permit comes [in] year five, you don’t even see it happen,” she added.

According to Baiget, another part of the problem was that businesses had not actually approached politicians to explain the issues they faced with such regulation.

“So I think … companies, we have a responsibility also to embrace that we did not proactively sit at the table, we let it go on, we complained,” she said.

Source: CNBC


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