The area of sustainability is both deep and far-reaching. The first formal references to sustainable development appeared in 1987 in the Brundtland Report to the UN. Today, sustainable development is understood as that which meets present needs without compromising the possibilities of future generations meeting their own. It is a concept encompassing three dimensions that are intertwined and that complement each other: the environmental, the social and the economic dimensions. The first of these, and perhaps the one bearing most relevance of late, is the environmental dimension, which refers to the way human and organizational activity generate impact on the environment and ecosystems.
Thus, there is growing social awareness with regards to environmental sustainability, particularly with the problem of climate change, which is giving rise to the enactment of increasingly stringent and more restrictive regulatory frameworks for dealing with the environmental impacts of the business community. A change is therefore underway in the global paradigm, having profound implications at the business level and compelling companies to adapt their strategies and activities. This change has direct effect on the activities of companies since it subjects them to a wide range of risks they must attempt to mitigate:
Among these risks to reputation, we may underscore the following: in the first place, there are reputational risks involved. Brand image may be affected where stakeholders in general and consumers in particular perceive a negative attitude from the company. Sooner rather than later, consumers will include the environmental performance of producing companies as part of the criteria in their purchasing decisions.
What is more, there are regulatory risks associated with the need to adapt the company to new legislative frameworks, with the resulting cost that may make certain activities unfeasible. Along the same lines, there may be a drop in the demand for products and services requiring significant energy consumption or which generate large quantities of emissions.
Lastly, legal risks also take on considerable significance, for tougher legislation may give rise to a greater number of lawsuits due to cases of infringement.
In addition, there are physical risks involved: climate change could generate installations problems leading to serious consequences. For example, flooding may occur in facilities located near the coast; a rise in precipitation in certain regions could exacerbate corrosion problems in facilities that are not specifically equipped to endure frequent rain; desertification of other geographical areas may lead to problems related to plant operation, etc.
Finally, there are other set of risks that are difficult to evaluate. For example, disruptive innovations may arise, involving either technology or new business models linked to combating climate change. These kinds of innovation can bring about marked changes in certain economic sectors, excluding players that have not anticipated the changes from the market. Market changes may also occur in such a way that growing pressure to reduce emissions may give certain geographies an advantage over others due to the natural resources available to them (access to solar radiation, for example), thereby altering the competitive balance: companies located in these geographical locations will boast a of significant competitive edge.
Photo taken by Deiviti Bronzel, for Bioenergía, from the 1st Edition of the Abengoa Sustainability Photography Contest
The basic aim of the policy on sustainability of any organization must be to mitigate and minimize all of these risks through a series of initiatives contributing to sustainable development. Nevertheless, just as these risks surface, so do new business opportunities.
Reputational opportunities: Businesses with proactive approach to climate change will be favored by customers who take these efforts into account. The others will notice the change straight away in their bottom line. Thus, it is advisable to remind those who harbor doubts about the importance of reputational risk of some well-known cases in the past, in which the flow of negative opinion towards a given brand wreaked havoc on profits. Today the commitment to sustainability represents a competitive advantage, but tomorrow it will be a prerequisite for being able to compete. Abengoa, as one of the companies that has proven its commitment to combating climate change from the beginning, thus has the chance to position itself as a point of reference in the area of sustainability.
Regulatory opportunities: Promoting innovation in certain business undertakings that may simultaneously lead to lower costs and a reduction in Greenhouse Gas (GHG) emissions. An example of this would be desalinating plants meeting their electricity needs through wave power (taking advantage of the desalination plant’s proximity to the coast), which will be a considerable competitive advantage as electrical power generation employing this type of technology matures. Likewise, other pursuits, such as zinc and aluminum recycling (Befesa) may increase business activity remarkably: recycling these metals leads to a very significant reduction in CO2 emissions, if compared to the alternative of extracting the material, an option that is not competitive in costs.
Legal opportunities: As the competing companies that fail to strictly abide by the valid laws see their costs surge as a result of environmental lawsuits, organizations that fulfill their commitments are left with the opportunity of becoming more competitive. Furthermore, the mandatory requirement of reducing GHG emissions or the setting up of obligatory blending proportions for biofuels can be seen as an opportunity for Abengoa’s businesses, because many companies will have to turn to clean energy sources to comply with the obligations.
Other opportunities: The innovations that Abengoa is currently pursuing in relation with sustainability (solar energy, sea and ocean power, hydrogen technology, energy efficiency, second-generation biofuels, CO2 capture and valuation, etc.) may become the key businesses of the future.
In short, sustainability policy must help to manage both the risks and the opportunities associated with climate change and sustainability. To achieve this, it is, on the one hand, necessary to know, understand and manage all types of risks, and, on the other, to identify, gauge and manage the potential opportunities, using suitable measurement tools, reporting systems, and improvement plans. Thus, Abengoa maintains a policy of sustainability, as well as an environmental policy that is clearly defined in its internal regulations, a risk management system covering environmental risks, a GHG emission inventory, and specific programs for lowering the emissions of all of the company’s business units. Specifically, we must point out several elements that make Abengoa a point of reference with regards to sustainability and the struggle against climate change:
Indeed Abengoa is convinced that the world needs solutions that permit sustainability. In line with this vision, over a decade ago the company decided to focus its growth on creating new technologies that contribute to sustainable development:
However, Abengoa centers company growth not only on activities contributing towards sustainable development. For some time now, Abengoa’s policy on sustainability has been part of the company’s business commitments and therefore Abengoa also seeks to conduct its activities in a sustainable manner.
Specifically, in the case of lowering Greenhouse Gas emissions, in 2007 Abengoa took the first step with the creation of Zeroemissions, a company that delivers global solutions for climate change through promotion, development and marketing of carbon credits, strategic carbon consultancy, voluntary emissions compensation, and innovative technologies for GHG reduction. The company later created its department of Sustainability. And as part of its strategy for achieving growth, Abengoa is conducting activities involving CO2capture and storage and energy efficiency. All of these lines of action converge upon a common objective, which is none other than halting climate change through a firm commitment to sustainability, integrating this commitment into its strategic approach:
It must be pointed out that this effort has been in motion for a long time, and, in addition to the emissions inventory, Abengoa is engaged in significant initiatives involving the struggle against climate change:
To sum up, with the aim of reaching business goals and fulfilling its commitment to sustainability and the struggle against climate change, Abengoa:
Through the Focus-Abengoa Foundation, the company also allocates human and economic resources to promoting social action policies that contribute to human and social progress.
This guiding philosophy, which drives Abengoa forward in developing innovative solutions for sustainability, has been instilled into the entire organization, and therefore defines the corporate mission and vision.
Abengoa is a technology company that applies innovative solutions for sustainability in the infrastructure, environmental and energy sectors, bringing long-term value to its shareholders through a management model based on encouraging entrepreneurial spirit, social responsibility, transparency, and rigor.
To become a global point of reference in developing innovative technological solutions for sustainable development.
At Abengoa, the vision goes far beyond a mere declaration of intent; it involves a truly inspiring guide for making strategic decisions, and thus company growth is based on investment in markets, activities and geographies in which:
This approach, which is in place at all company levels, is one of Abengoa’s keys to success.
The new Abengoa headquarters in Seville, inaugurated on September 23, is the first industrial park dedicated to innovation in Andalucia and the largest private technological business complex in southern Spain.
The Palmas Altas Campus (PAC) was designed by Richard Rogers, an architect who worked together with Spanish Vidal and Architectural Associates (Madrid), Juan Fernández Carbonell Studio (Seville), and Agrup Engineering.
Photo taken by Bernabé Lugo Puerto, for Inabensa, from the 1st Edition of the Abengoa Sustainability Photography Contest
This Campus, striving to become a point of reference in sustainable construction, incorporates the latest concepts in sustainability, especially in elements related to the application of state-of-the-art energy saving and efficiency solutions. The complex is thus based on an optimized architectural design and the use of renewable energies in order to minimize the need to employ contaminating energy sources. In this respect, especially worth mentioning are the following elements:
Photo taken by Eduardo Rituerto García, for Inabensa, from the 1st Edition of the Abengoa Sustainability Photography Contest
Commendation. 1st Edition of the Abengoa Sustainability Photography Contest, submitted by María Márquez-Sánchez Bermejo, of Abener
Commendation. 1st Edition of the Abengoa Sustainability Photography Contest, submitted by Ana Carnal Adrés-Montalvo, of Zeroemissions
Commendation. 1stEdition of the Abengoa Sustainability Photography Contest, submitted by Mª Victoria Sánchez Jiménez, of Abengoa
Abengoa is convinced that the world needs solutions that permit sustainable development