well to traditional Europeanstrengths. The continent already has a global head

start in sustainability. In 2020, it created more energy from renewables than fossil fuels and its leaders are collaborating across business, gov- ernment and society to create an ambitious agenda for sustainable change while investing in green start-ups. Europe’s companies score more highly in

ESG ratings thancompetitors, and in their post- pandemic rebound and mid-term strategies, they are prioritising both technology adoption and sustainability. Investors are interested: last year sustainabil-

ity was featured in far more European earnings calls than in other regions and 53% of Europe’s top companies also discussed technology. The embodiment of Europe’s potential to

lead the twin transformation can be found, for instance, at Schneider Electric. In January, it soared to the top of the annual Global 100 index of green firms to be named the world’s most sustainable corporation. The company epitomises the strategic embrace of technology and sustainability, but also illustrates some- thing that at this juncture is just as important: the concrete business value of doing so. Schneider has doubled itsmarket value tomore than €70bn in the past two years alone. Of course, Schneider is not alone—it is one

of nine companies in the Global 100 index based in France, whose neighbour Germany is home to seven of the top 100. Other European companies making the twin transformation also score highly in the rankings — Schneider ousted Danish wind power giant Ørsted from last year’s top spot — or have become house- hold names. Danish bioscience company Christian

Hansen allocates 75% of research and develop- ment spending to natural nutrition supported by digital technologies. German engineer Siemens uses simulation and digital twins to green its output, and French luxury goods group Kering has devised digital solutions to slash the environmental footprint of fashion. French personal care company L’Oréal har- nesses technology to ensure use of sustainable palm oil, and German delivery group Deutsche Post DHL has empowered consumers to choose low-carbon shipping.

Newworld order With their strategic vision and commitment to a way of doing business that prioritises values, these Europeancompanies feel very different to their predecessors. That is because twin trans- formers instinctively understand they are on the brink of a global transformation in which success — indeed survival — is premised on a need to harness the forces of the future. At the end of the cold war, it was current to

talk about the “new world order” — which was as unpredictable as it was exhilarating — and there is little doubt in the context of the digital and sustainable transformations that Covid-19

February/March 2021

has brought us to a similar juncture. Just as it was then, the future will be distin-

guished by bothcontradictory andcomplemen- tary trends — many of which have already played out in Europe. A new multilateralism will tussle with regional divergence as conti- nents cooperate, but also diverge. A key lesson from the pandemic is the

importance of global cooperation to tackle problems that affect the whole human race — andmultilateralism will change to reflect this. Yet at the same time, regional supply chains could turn inwards as companies facing short- ages and bottlenecks decide to reshore produc- tion: a form of “deglobalisation” that will push some to localise business operations favouring national or regional suppliers. How we view the world economy is also

being turned on its head. Striking variations in the impact of Covid-19 have highlighted deep inequalities and drawn attention to the social value of ‘key’ public workers. Nothing short of the future of capitalism is

upfor grabs, as the goals for recovery are shaped by anewsocial contract distinguished by public investmentin the careeconomy, education,and low-carbon infrastructure — features reflected in the fabric of European society. Twin transformers are ahead of the curve,

having instinctively understood the new chal- lenges posed by the pandemic to business mod- els that have in the past allowed companies to shirk responsibility for their workers. The rise of digital behaviour — from remote working and learning to telemedicine — has accelerated alongside automation, meaning the future of work has never been more fluid. This poses huge challenges for businesses, which must address workers’ needs more than ever while preparing themfor a workplace revolution. Against this backdrop, changing dynamics

in technology and sustainability investment will reshape international performance, and could result in greater regional levelling—fuel- ling competition. As Europe begins to catch up with Asia on

technology, for example, Asia will begin to catch up with Europe on sustainability. While before Covid-19 Europeans trailed in the adop- tion of technologies like artificial intelligence, cloud computing and 5G, nearly 40% are now making large investments. In turn, Europe’s first mover advantages in sustainability look precarious as demand for ESG investment in Asia-Pacific soars. The rise of the twin transformers represents

an evolutionary adaptation to thesemonumen- tal changes in the business landscape as the recovery gainsmomentum. They are equipping themselves for a new order shaped by unfore- seen change morecomprehensively and rapidly than their peers—andimmunising themselves against the uncertainties of recovery.■

Jean-Marc Ollagnier is the chief executive of Accenture for Europe.



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