How can we advance towards a new economy

HOW CAN WE ADVANCE TOWARDS TOWARDS A NEW ECONOMY? Introducing new bases in favour of society

Fernando Varela

How can we advance towards a New Economy?

APPENDIX 1. Why talk about a New Economy? ............................................................................................. ............................. 3 2. What is meant by a New Economy ............................................................................................ ............................ 7 3. What needs to be done to promote a New Economy ........................................................... ........................... 13 From the private sector (corporate and financial) ................................................................ .................................. 15 From the public sector ................................................................................................ ................................ ........................................... 18 From civil society ................................................................................................ ................................ ................................................... 29 4. The role of the public sector in the promotion of a New Economy ..................................... ................................ 31 5. Some actions to facilitate the change................................................................ ..................................................... 35 6. Obstacles and justification to advance in the implementation of the New Economy ........ 37 7. Some ideas for Europe that Spain can make its own ............................................................ ............................ 42 References ................................................................................................................................ ................................ .................................... 46 Many of the problems we face are rooted in our understanding of the economy and its relationship with nature. This paper is based on the demand for a more inclusive and sustainable economy. To do this we will review some of the proposals that are being promoted moted as alternatives to the current system and some actions that would advance new standards are proposed. These involve changing perceptions of what is meant by the success of companies, enabling the consumer to distinguish the quality of companies on their eir social and environmental contributions, as well as the establishment by the public sector of an environment that promotes the business sector that contributes the most to society. Ultimately, the goal of this reflection is to offer a guidance towards the he necessary corrections to make a more general interest oriented model, which puts people at the centre and preserves the environment. Is this possible? February 2016

How can we advance towards a New Economy?

1. Why talk about a New Economy? Capitalism, as we conceive it today, is the story of the growing subordination of labour to capital. When it started in the late eighteenth century it was not known how it was truly going to develop. It was thought that it was a system that would boost the economy, which would increase productivity through competition and that the cascading effect of the growth would benefit everyone. Today, with a long history during which the system has spread across many parts of the world, we can know the results and make an assessment. We can say that the invisible hand han which Adam Smith spoke about is not able to correct the contradictions of market laws. While we cannot deny that in some areas this system has generated spectacular levels of material development, we also now know with certainty that there have been undesirable undesirable effects and their maintenance over time determines the very survival of the system. Many are the problems that we face whose impacts have effects on all of us: deterioration of the labour market, high and chronic unemployment, rising inequality, illegal immigration, accelerated destruction of natural habitats, biodiversity loss, deterioration deterioration of soils for cultivation, reduction of groundwater and pollution of freshwater sources, air pollution by non-renewable non renewable energy, global warming, etc. Many of these problems are rooted in our understanding understanding of the economy and its relationship with nature. e. In the history of mankind we find examples of people who have disappeared as a result of practices that ended up tragically affecting their livelihoods. Today, the impact of problems like those mentioned above have a global reach, creating enormous difficulties difficulties for an increasingly large population and threatening the future of people in both industrialised countries and those in the process of industrialisation. There is a widespread appreciation that we cannot go on like this, we need to change. The voices vo calling for a new economy that produces a positive impact on people and the environment have increased worldwide1. In other words, an economy that increases opportunities for people caring for the planet's resources is in demand. demand The question is whether her the economic system, as it is designed and works today, can produce what the world expects in terms of sustainable human development. Since reality shows hows us that it is not like this, this, that it is necessary to introduce corrections to the system, it is important that we begin to raise the economy on new bases.

According to the CESCE (‘Compañía Compañía Española de Seguros de Crédito a la Exportación’ Exportación - Spanish Insurance of Export Credit Company), according to the 2014 Global Survey1 by the International Trade Union Confederation (ITUC), there is not a single country where most people believe that the economic system is fair. In this sense, four out of five people (78%) are convinced that the economic system favours the rich. Also, 88% of Germans and 90% of Austrians want a "new economic order" - Bertelsmann Foundation Survey1- and, without a doubt, this data is endorsed in countries that have suffered most severely from the economic crisis, such as Greece, Portugal, Ireland, Spain and Italy.

How can we advance towards a New Economy?

And it is not about returning to models that have had their moment in history and have proven inadequate. It is about evolving, evolving, taking advantage of the benefits of the current economy but based on other approaches that ensure the desired impact. It is therefore necessary to introduce corrections to the system, implementing necessary regulations to guide the economy putting people at the heart of it, promoting general welfare and preserving the environment. environment Obviously iously in order to achieve this, companies with business models that produce real social and an environmental value are required. required It is all about business approaches that generate gener prosperity, decent jobs, without eroding the social and environmental contexts in which they operate. To facilitate tate this process it is necessary that the regulatory frameworks in which companies operate promote and prevail, those that provide economic value but also social and environmental value. And consumers, through our purchasing power, opt for these companies. Beyond this general justification, there are other reasons making up the argument for a different economy: In the first place, it is necessary ssary to mention that a market economy with a social focus is the goal go of the economic policy of the European Union (EU). In Article 3, Paragraph 3 of the Maastricht Treaty it says in the context of the European internal market, that the EU "shall "shall work towards the sustainable development of Europe based on balanced economic growth and price stability, in a highly competitive titive social market economy, aiming at full employment and social progress, at a high level of protection and improvement of the quality of the environment". environment" In addition, the constitutions of most countries establish that the goal of economic activity should s be directed towards the general good. Also, because solving the world's problems requires the involvement of all acting parties. And the private sector, as a powerful agent of transformation of societies, has the ability to modify impacts and minimise negative externalities, generating greater social and environmental value.

The problems which we face are related to our way of understanding the economy

So companies, in the framework of a market economy with social characteristics, can become powerful generators of sustainable development generating positive effects that contribute to the challenges of poverty and climate change. It is important to note that numerous investigations have highlighted that approaches appr with more social and environmental value lue are also interesting to companies because they reduce business risk, provide stability for investment and generate new opportunities upon having a positive impact on their reputation2. Also the financial system, tem, which has shown great creativity in extracting economic value valu from companies and society converting into a very successful business, business, can direct its activities to strengthening its role as a catalyst for the real economy, increasing its ability to finance fina companies that offer value and solutions for a more sustainable society avoiding distortions and speculation generating instability and crisis. 2

For reference see the World Business Council of Sustainable Development which has researched and produced numerous studies and publications.

How can we advance towards a New Economy?

Another factor of instability and slowdown in the economy is the growing inequality that is favoured by thee current economic system3. Economic concentration in few hands has an effect on the revitalisation of the economy since the balance in terms of consumption is lower among individuals who accumulate income and the same income distributed to a greater number number of people4. Without going into the criteria of social justice, excessive inequality adversely affects the economy and creates social instability. On the other hand, the extent of national progress in economic growth in terms of GDP and income incom per capita,, is an inexact variable, that says little as an indicator of the development of people. This reductionist view, however, is widely used for the definition of public policies and obvious aspects linked to social and environmental development. In addition, through a people--centred centred economy and the general good we can better achieve the objectives of Sustainable Development, a recently acquired acquired commitment by consensus of all the nations of the world, or the Paris Agreement greement reached at the end of 2015 and that has fostered the Framework Convention about Climate Change. This comment is valid for the goals of most of the international submits which pursue progress in the reduction of poverty and sustainability, sustainability and that in many occasions face great difficulties to become reality. Europe is getting to know first-hand first hand the reality of many people's lives in the world due to the growing influx of economic migration. The quick answer is that things have to be fixed in their origins. For this new ew programmes of cooperation have been proposed. Which is all good and well. But they are palliative. The causes are structural. The economic system favours the strong and relegates the weak. The most vulnerable countries have great difficulty in competing in a market dominated nated by those who define the rules, aggravating inequalities. European countries grow little and generate less employment. There is a need to change the model of growth to a more sustainable and inclusive one with greater potential for the generation of employment. In a more competitive world, where emerging countries are growing faster than the European economy and with production costs difficult to match, Europe has the opportunity to link itself to quality and sustainability, giving more value to products. products. The 'Europe Brand' implies and can imply significant competitive advantage. It is significant that the burden of illnesses of societies with greater material development is worryingly high, in spite of having the best health system, and it appears that the type of illnesses in materialistic societies is different, more related to psychological and cardiovascular aspects (with respect to societies with lower per capita income5). Material development doesn't necessarily lead to better health. People's welfare or happiness is related to other dimensions such as relationships, participation, community building, etc. In short, a people-oriented economy, which contributes more to the common mon good, which has greater potential to generate opportunities is required, required, it creates more jobs and preserves natural resources in the long term.

See the last reportrt of Oxfam â&#x20AC;&#x153;An economy for the 1%â&#x20AC;?. February 2016 See Stiglitz: 'The Price of Inequality'. According to this author who is a winner of a Nobel Prize in economics, the rise in high incomes has a lower impact on consumption than the rise in average and low l incomes. 5 According to information from the World Health Organization (Burden Disease) 4

How can we advance towards a New Economy?

Is this possible? Can we evolve evolv towards an economy like this?? On which bases should it be laid out? What actions will have to be carried out?

How can we advance towards a New Economy?

2. What is meant by a New Economy Currently and for years now we have been experiencing a blossoming of proposals that provide different ferent approaches advocating a New Economy Economy more in line with the demands of the people and which respects the environment more. Some involve corrections to the market system and others constitute really new economic systems supported by completely different bases. Departing from the current situation, ituation, the focus of this paper is centred on suggesting the steps that different acting parties can take to move towards a New Economy Economy and proposing some actions to take that are considered key to improvement in terms of impacts on people and the planet. The Social Market Economy The Social Market Economy is based on the market system to optimise resource resour allocation, correcting and establishing the institutional, ethical and social conditions to guide towards efficient and equitable results. It is characterised by being based on the market system, but with a social policy constituting the greatest difference difference to neoliberalism. The Social Market Economy as a basic socio-political political model comes from the ideas developed by Alfred M端ller-Armack Armack (1901-1978). The core of the Social Market Economy is the "combination of the principle of the free market with the principle of social equity." The anthropological-social anthropological social referential framework is the concept of human liberty complemented by social justice. The system that promotes the Social Market Economy stems from the interest in synthesising all the advantages of the market economic system: promoting individual initiative, productivity, efficiency, tendency to self-regulation, regulation, with the fundamental contributions of the Christian social tradition of solidarity and cooperation, which are necessarily based on equity and an justice in a given society. In this sense it proposes a theoretical and economic-institutional economic institutional policy framework that seeks to combine individual freedom of action within an order of personal and social responsibility. The social market economy is based on the following values: human dignity, the common good, solidarity and subsidiarity. The goal is to implement an economic system that is at the service of the people. The Economy for the Common Good The Economy for the Common Good is established as a market market system, in which the motivations and objectives of the companies are based on contribution to the common good and cooperation and not on profit motive and competition. The economy for the common good is based on the values which allow our relationships relationshi to develop: Confidence, Responsibility, Appreciation, Democracy, Solidarity and Cooperation. The results of the contemporary investigations show that these values, despite the prejudices in the background, are more compatible with 'human nature'. The postulates of the Economy for the Common Good have been developed by Christian C Felber in 2010 in collaboration with of a group of businessmen. In 2015 the Economy for the Common Good received the recognition of the European Economic and Social Committee (EESC) as an economic model oriented towards social cohesion and of interest for to European region. 7

How can we advance towards a New Economy?

The EESC considers that "the model of the Economy for the Common Good (ECG) is designed to be included in the European and national legal framework in order to move towards a single European market through a more ethical economy based on European values and the achievements of social responsibility policies, also creating synergies aimed at strengthening stre it". The economic model that seeks the common good is founded on values recognised as universal: human dignity, solidarity, ecological sustainability, social justice, transparency and democratic participation. The Circular Economy The circular economy attempts to respond to the question of how to produce goods by limiting the amount of raw materials and non-renewable non renewable energy we consume and waste. The lineal focus of 'produce, use and throw' isn't viable any more. The circular economy is an economy econo that is based on the functioning of ecosystems in nature. For this it promotes the use of what it calls biological and technical nutrients6. Biological nutrients are biodegradable and can be introduced into nature after their use value is no longer profitable. profitable. Examples of biological nutrients could be cotton, biodegradable plastic materials (polylactic acid, PLA), organic esters (soap), etc. Technical nutrients refer to the technological components that are unfit for human beings and, therefore, are reused ed again and again without going into nature.

These components are designed to be assembled and disassembled many times, encouraging the re-use use of materials and energy saving. The concept of a circular economy is based on the life cycle of the use of resources. Thus, recycling, the replacement of certain resources, durability and re-use re of products or parts and waste reduction is promoted. The concept integrates product design with this philosophy, and new forms of business. 6

Definition from the Ellen Macarthur Foundation

How can we advance towards a New Economy?

Circular economy develops from other proposals such as the blue economy and the economy of functionality (explained below); regenerative design (processes that renew the resources used themselves); cradle to cradle (consideration of the materials used as nutrients); industrial ecology eco (closed production systems that eliminate the generation of by-products); by products); biomimicry (emulation of the production processes of nature itself). The Blue Economy The Blue Economy aims to achieve a radical change in our models of design, production and consumption to ensure that our production systems are able to imitate as much as possible what nature has undergone in billions of years of evolution. Gunter Pauli's proposal in his book ‘The Blue Economy’ tries to take advantage, with an innovative attitude, attitude, of many sources of income throughout new production processes that emulate nature's ecosystems. The Blue Economy already has a lot of experience such as the cultivation of edible mushrooms with high quality coffee waste (present also in Spain), biodegradable biodegradable detergents with traces of orange peel or the transformation of petrol stations into charging stations for electric vehicles. Collaborative Consumption The term 'Collaborative Consumption' comes from the expression 'Sharing Economy', divulged separately by Lisa Gansky and Rachel Botsman with Roo Rogers in 20107. Collaborative consumption implies new forms of exchange, the hire of goods and services that arise from the new uses of the Internet and mobile technology. According to the EU, "Collaborative consumption represents advantageous complementation from the innovative, economic and ecological point of view of the production economy for the consumption economy. It also represents a solution to the economic and financial crisis as far as facilitating the exchange in cases of need."

There is a flourishing development of alternative proposals with interesting ideas with potential to transform the economy

In collaborative consumption initiatives of various kinds are integrated, with the common feature of being based on information and communication technologies. Through the creation of social networks and portals, interactions take place between individuals on a mass scale.

In this type of economy the following are included8: 1) open knowledge (collaborative initiatives that promote the open dissemination of knowledge, and the ability to reuse and redistribute without legal, social or technological obstacles obstacl - such as Wikipedia and open Software -); 2) collaborative consumption: access to goods and services without unlawfully holding the ownership thereof, through digital platforms - such as Streetbank, free, or Uber and Blablacar, paid -; 3) Collaborative production: also includes professional structures (networks) in which direct contacts between users are established for the management and development of shared projects, services or objects of all

Reference: Botsman, R. and Rogers, R. (2010). ( ‘What's What's Mine is Yours: The Rise of Collaborative Consumption’. Botsman, R. and Rogers, R. (2010). 8 According to Joaco Alegre, Vice-president president of the Orué Driving Group – The collaborative currency-.

How can we advance towards a New Economy?

kinds - like in the fields of design, architecture and industrial industrial engineering -. 4) Collaborative Finances financial transactions that occur directly between individuals without the intervention interv of a traditional financial institution - such as microcredits, multitudinous funds, social loans and savings. This economy nomy offers advantages from the environmental point of view because it increases efficiency, stimulates the development of better products and eliminates surplus due to excess production and consumption9. The Economy of Functionality The economy of functionality advocates an economy based on the use and maintenance of resources as opposed to an economy based on energy and raw materials. The intention is to sell the use and not the product. In this way manufacturers are driven to opt for more robust and a durable products avoiding the waste of raw materials. The intention is the movement of an industry with high consumption of raw materials to an industry of durable goods, which is more sustainable and where the business is to sell the use of goods. Participatory Economics Emerging in the early nineties, participatory economics seeks to encourage that all economic decisions during production and consumption are made in a democratic and participatory manner. It is based on the thesis of Michael Albert and and Robin Hahnel synthesised in the book ‘Parecon: Life after Capitalism’10. This type of economics promotes that workers and consumers cooperate to determine their economic preferences and benefit from them, in a way that promotes equity, solidarity, diversity and self-management. management. This type of economics rejects the private ownership of the means of production oduction trying to involve workers more and reward their effort. Economy of Communion The Economy of Communion, founded by Chiara Lubich in May 1991 in Sao Paulo, Pa is based on the promotion of a practice and an economical culture characterized by Communion, donations and reciprocity, offering and living an alternative way of life to the one predominating in the capitalist system. The Economy of Communion is an economic development project with a supportive nature involving companies from the five continents. The owners of companies which freely adhere to the project decide to put in communion their benefits, according to three objectives: 1.) support to people in need,, creating new job positions; 2.) disseminate a culture of giving and love; 3.) the development of the company.

According to Rachel Botsman and Roo Rogers (2010). ‘What's Mine is Yours: The Rise of Collaborative Consumption’. NY. Harper Collins. 10 Reference: Albert, M. (2006). ‘Parecon: Life after Capitalism’. Akal.

How can we advance towards a New Economy?

Community economy The Economy based in community or Community Economy fosters a simple ways of life such as the so called eco-villages.. Within the last few years, ye an extra interest has appeared ppeared for this kind of initiatives which also integrate ate the Transition Towns that are advocating for a return to local scale economies. A community in transition is a civic ci communitarian projectt aiming to create resistance or resilience against negative effects of economy. It is i a pragmatic and an apolitical movement in favour of agro-ecology, Permaculture, ermaculture, consumption of local and/or collective tive products, decrease, in summary, towards the recovery of abilities for life and harmony with the rest of Nature.

The Resource-Based Based Economy The Resource-Based Based Economy (RBE) is a proposal of life that is based on the efficient use of resources to generate wealth through technology and human empathy, where the scientific method and other similar ones are applied to social interest and welfare. Specifically, this proposal is also seen as a local and global resource management system in which goods and nd services are available to everyone as a common asset of humanity to all the inhabitants of our planet, where there is no need to use money, systems of credit or finance, bartering or any other system of exchange or trade.11 In short, these proposals provide vide a whole different way of understanding the economy, attempting to return it to the purpose for which it was designed, re-conceiving re conceiving it as a means for the development of individuals and societies and not as an end in itself. The above proposals share interest in a more humane and environmentally friendly economy. Some are in favour of introducing corrections to the market system. Other more extreme ones propose different systems. From then some interesting ideas can be identified with the potential to improve the economic system as we know it today.

Definition provided by the RBE Community (Resource-Based (Resource Economy)

How can we advance towards a New Economy?

The Social Market Economy advocates a social policy tempered by a better balance between free market economy and social equity. The Economy for the Common Good understands that this must be the objective of the economy and proposes that competition is replaced by cooperation which is a sentiment ultimately more in line with human nature. The concept of a Circular Economy is based on the life cycle of resource use and proposes that production production is designed and carried out from the perspective of the functioning of natural ecosystems ensuring a more rational use of resources. It is based on the principles of the Blue Economy extending them to any production process and on the Economy of Functionality, Functionality, which stimulates the production of more durable goods, seeking to deal with the business strategy of planned obsolescence. Collaborative Consumption is based on information technologies to promote the sharing of resources by decreasing the pressure ssure on the production of new resources. It shares the same principle as the Economy of Functionality of prioritising the use (when faced with property) exploiting the interconnection potential of new technologies. Participatory Economics proposes to democratize the use of resources, rejecting private property for the benefit of greater worker participation. Economy of Communion focuses on the use of business benefits that should be allocated to solidarity and corporate growth. growth The community economy aims to promote local dynamics transiting towards more simple lives that donâ&#x20AC;&#x2122;t exercise so much pressure on resources. Finally, the Resource-Based Based Economy proposes that goods and services are common assets avoiding the need to use the money.

How can we advance towards a New Economy?

3. What needs to be done to promote a New Economy conomy The transformation into a new economy requires adequate operating bases that lead to the expected results. Which are these bases: -

Setting a different measure of business success (economic, social and environmental) and economic progress

Implementation of incentives that favour more sustainable companies

Enabling consumer information so they are able to choose more sustainable products and services

Measuring from progress an nd business results in the most complete way (economic, social and environmental) Facilitating consumer choice of more sustainable products and services

Granting advantages to companies that contribute more to society

The development of a more active role and of regulation of the public sector in the direction of the economy is usually not well received by some acting parties in the economic system, especially those companies or investors who prefer to have no restriction on their forms of action or the contents of the projects or companies they finance. finance. The requirement to include any costs associated with the negative externalities that their activities generate is rejected. However, the reality is that the abuses and excesses of numerous entities of the private sector and the financial sector as well as the lack of regulation are at the core of the crisis and of adverse effects on people and the environment. And it has a high cost for citizens. Better regulation which preferably rewards companies and investors to support an economy with a greater impact is something that should be seen as positive for society. This is not about putting up barriers but favouring those that contribute more, those that are of interest to society and that don't do generate more negative impact. impact The voluntary character of many initiatives in this field is important but not enough. Voluntarism has The transformation into a new its limits especially when the hunger for new economy requires adequate contracts racts or the improvement of annual results operating bases. exert pressure, sure, calling into question ways of operating or the politics of CSR. And there are many examples. It is imperative to overcome willingness and self-regulation self regulation advancing towards obligations and parameterisation, enabling the external audit of the non-financial non financial aspects.

How can we advance towards a New Economy?

A favourable framework is needed to prioritise those companies that have clear principles and rules generating favourable results for themselves and for society. To the principle that those who contaminate pay, we must add that those who contribute more are rewarded. To make this framework reality all acting parties are needed, though certainly the public sector has a crucial role in establishing dynamic incentives and appropriate regulations. Here are some proposals outlined by the main acting parties in society:

SCHEME OF TRANSFORMATION TOWARDS THE NEW ECONOMY

Source: Own elaboration

How can we advance towards a New Economy?

From the

private sector (corporate and financial)

Transform businesses to generate more social and environmental value (reviewing the value chain) The commitment to sustainability and approaches aimed at increasing social and environmental environme value are beneficial to a company. There is ample evidence that an environmentally careful company that generates a positive impact on the environment in which it operates, reduces corporate risks by strengthening business. The studies of numerous cases12 demonstrate that, far from requiring additional costs, the investments turn tu out to be beneficial in changing the ways wa of operating and taking into account some factors often reviled. The corporate approaches that contribute most to society generally are more attractive to the local client and improve reputation and consumer appreciation, strengthening customer loyalty and facilitating partnerships and agreements. In the case of investments in other countries, they can create a positive appreciation of the public sector (in aligning with its objectives of promoting the general interest) which will give greater stability to investment, reducing political risk or legal uncertainty on investment. Also, reducing the negative impacts means lower compensation costs. Moreover, the idea of contributing, through entrepreneurship, to improve and promote living conditions and opportunities for people, is a source of motivation and commitment commitment in the staff with a company, providing in the opinion of some an element of sense and commitment to the job.

â&#x20AC;&#x153;Companies Companies generating economic, social and environmental valueâ&#x20AC;? value It is essential that a company seeking to contribute to sustainability and society in general, reviews its value chain: it is possible to do the same but in another way, maximising the sociosocio environmental impact of its production process. This requires review review of the supply and distribution chain taking into account environmental, social and political-institutional political institutional aspects. There are already numerous methodologies that enable the carrying out this type of analysis. All that is needed is the will to do it. We are talking about sustainable methods of cultivation for agricultural products, development of circular systems in industrial processes, the introduction of renewable energy or energy efficient measures, transport systems and sustainable packaging, working workin conditions, accountability, etc. Although some companies have already integrated this philosophy, it implies a big change for many; it requires taking the life cycle of products and services fully into account, working differently with suppliers and partners partners and introducing innovations in the value chain. In promoting this approach to business, business associations have an important role, forming, promoting the exchange of experiences and disseminating good practices.

The WBSCD offers many examples. Also the United United Nations Global Compact. For the author's contribution see the following referenced book of analysis of cases: 'The suitability of pro-development pro development approaches in international businesses'.

How can we advance towards a New Economy?

Measuring not only their economic econ but social and environmental impact A New Economy conomy needs to measure results taking into account not only economic but also social and environmental dimensions. The company that wants to promote the creation of value for society must measure their impact imp and review their value chain. In the large company field, reporting the triple profit and loss account (economic, social and environmental) in corporate CSR policies is widespread but remains voluntary. The GRI (Global Reporting Initiative) guidelines are a standard for the production of reports that facilitate the measurement of an organisation's contributions to sustainability. The so-called so integrated memories are one step further since they provide information about all the company's activity from the three areas and they are spreading.

"Measuring the social and environmental impact" From the point of view of regulations, since 2014 201 there has been a European directive which obliges companies with more than 500 employees to report on no financial aspects. The regulations are demanding more transparency so that companies account for their impacts. Just as the World Business Council of Sustainable Development (WBCSD) indicates there are numerous methods to measure the impact of companies13. What stands out is the proposal of the Economy for the Common Good which proposes a simple matrix adaptable to all types of business that would show the value of the company to society, to the common good (see Common Good Balance). A major transformation nsformation factor would be to extend the measurement of value creation to all types of companies, so that administrations can distinguish companies with bigger and better contribution to sustainable development. Thus the granting of tax benefits or additional additional points in the evaluation of proposals under bidding processes would be made possible, in order to reward companies that contribute more to the betterment of society. Developing skills and aligning business incentives with sustainability The commitment nt to sustainability requires vision on the part of company management and corporate capabilities to orient the model and processes, activities and products in this regard. To do this companies have to train their staff, reassign them and/or incorporate specialised specialised personnel. “Business incentives aligned with sustainability” sustainability It is also necessary for business objectives and employee incentives to be aligned with sustainability integrating not only economic but also social and environmental variables (depending on the activity of the company), recognising the contribution of value in the long term. This also applies to the financial sector.

Reference: WBCSD (2012). ‘Measuring Impact. Framework methodology. methodology. Understanding the business contribution to society.’

How can we advance towards a New Economy?

Integrating the culture of sustainability into corporate communication The communication of businesses reaches all areas of society. If this communication integrates and promotes the values of society the capacity for social influence increases exponentially. The work that marketing and communication departments can do in sensitising sensitising society is very important. This is an area where companies can also exert a positive influence on policy changes and consumer behaviour.

"Culture of sustainability aligned with corporate communication" Integrating interest in sustainability and suitability of approaches with greater social and environmental value into the curriculum of business schools Business schools, where future entrepreneurs are trained, play an important role in ensuring the expansion and maintenance of these approaches. In 2007 the United Nations Global Compact launched the Principles for Responsible Management Education (PRME) through which, the business schools that adhere undertake to develop the capabilities of students to be generators of company value lue in society and work for a more inclusive and sustainable global economy.

“Business Business schools promoting companies with social and environmental value” To do this, they incorporate this training into their curriculum committing themselves to developing and promoting research, learning and overall corporate culture around the values of responsibility and sustainability. Increasing the demand on investors and financial intermediaries for a use of their capital with more value for society Just as consumers can reward the most sustainable companies by buying their products, investors can also exercise their choice opting for investment opportunities with higher higher value to society. Or they can influence the funds or companies in which they invest. The possibilities and strategies are varied: exclusion of investments in areas such as weapons, tobacco, gambling, investments generating emissions; choice of the best best investments (best in class) following such sustainability indices as those with a higher degree of integration of ESG criteria;14selection of investments explicitly designed to solve a social or environmental issue.

"Prioritisation of socially responsible investments" Combined with economic outcomes (impact investing) normally associated with alternative assets such as microfinance, climate change, water, sustainable forests or renewable energy; involvement in thee policies of action of companies, exerting its influence, tracking and reacting on the impact of its policies, processes, activities and resources; exercise of voting rights at shareholders' meetings. 14

These globally accepted acronyms (E: Environmental, S: Social and G: Governance - ESG) are the areas where the impact of the activity of a company or organisation is analysed: • The environmental aspect relates to the direct or indirect impact of the company on the environment. • The social criteria relates to the impact and relationships with stakeholders having as reference universal values on human and labour rights, etc. • The aspect ect of corporate governance refers to the way the company is managed, administered and controlled and, above all, to its relations with its shareholders, directors, officers, etc.

How can we advance towards a New Economy?

It is also necessary to develop and provide financial formulas that allow access to the financing of business models with special value to society (in the case of social companies). It is in regards to business projects that face social needs and are now proliferating and find difficulty in accessing standardised ised financial services. It is necessary that financial institutions across the value chain of financial services deploy different services as patient capital15, public-private private financing structures or risk-sharing mechanisms.

From the

public sector

Measuring national progress more broadly establishing goals related not only to the economic but to the social and environmental The reductionist view of measuring national progress in terms of GDP and income per capita is very widespread. However, this measure measure of progress does not provide information on achievements in terms of social and environmental development. And these are issues that matter to citizens. It is necessary to change the way we measure progress by inserting other variables that provide information on progress in different dimensions of progress to better reflect changes in the lives of people (such as the changes in social and natural capital). capital). By way of example we can mention the Domestic Product of the Common Good, Good the Real Progress gress Index, the Living Standards Index, the Green GDP, the Human Development Index, the Human Development adjusted to inequality Index, the Ecological Footprint, etc, Economic growth is important but so is how that national wealth is distributed. To what extent the environment arising from such growth is degraded is also important. And how it affects the standard of living of citizens from the perspective of households. Indicators that expand the information provided by indicators such as GDP are required, associated associated further with an ideological vision of the economy and the world. Other variables such as the level of wellbeing of the population, quality of life, degree of happiness and sustainability exist which provide another view on the status and progress of societies. And they are already measuring, we only need to incorporate and define appropriate policies for improvement.

"New measure of national progress" For its part, the government could set specific objectives linked to changes in the social and natural capital. Goals such as the level of emissions, degree of deforestation, waste recycling level or reduced levels of poverty, unemployment, etc., making clear clear what measures it intends to implement to reach them. Progress could also be measured using the United Nations Sustainable Development Goals recently approved and implemented. Measuring business success considering economic, social and environmental variables A New Economy conomy needs the perception of business success to contemplate other dimensions beyond economic performance. A company that degrades the environment or has a negative social impact cannot be considered a successful company even if its economic economic performance is significant. This requires that society and the public sector especially, give precedence to companies that add value to society, economically, but also in social and environmental matters. To carry out this 15

Patient Capital: long-term term loans and high-risk high projects with high social returns

How can we advance towards a New Economy?

evaluation it is essential to know what the performance is in all three areas. Along these lines, some large companies are already generating information on the triple profit and loss account through the built-in memory. In order to make an assessment and implement measures that put a premium on the most successful companies in providing value in all dimensions, it is necessary to have an evaluation system with a standard character. As already mentioned, the matrix called Common Good Balance which includes dimensions of interest for for an economy focused on producing value for society economy is interesting. In any case, the reporting requirements should be simple and adapted to the size of the companies and likely to be audited.

"Business success linked to the level of contribution to society" Reward from the public sector via tax, public procurement, commercial or financial policies to the most sustainable companies The public sector has the ability to establish a framework in which those companies that provide the greatest value to society are benefitted and therefore promoted. If the public sector safeguards the public interest it makes sense to use its ability to guide the economy so as to produce the largest and best possible value for society. And the possibilities possibilities are many, from fiscally rewarding the companies with better socio-environmental socio impact to including socio-environmental environmental clauses in public procurement or including socio-environmental socio environmental criteria in the selection of beneficiaries of grants or public creditt support to the company and its internationalisation or including these criteria in policies for internal and external trade. From a fiscal point of view, many steps can be taken towards promoting sustainable development, increasing revenue and reducing inequalities. To promote sustainable development advantages over corporate taxes could be considered, giving tax breaks to companies that are committed to sustainability to a greater extent. One of the initial advantages that could be promoted is to reward companies reporting extra-financial financial factors (social and environmental impacts); also in addition to those that make a better contribution in these areas (e.g. through the valuation obtained applying the Common Good Balance16). Regarding the increase in revenue, enue, it can be ensured that multinationals pay taxes avoiding getting round it through financial engineering, preventing tax avoidance and evasion. The taxation of capital incomes can also be reviewed to assimilate them to labour incomes. Or with respect to the reduction of inequalities, integrating more progressiveness in income tax and ensuring better functioning of bilateral double taxation agreements. In the field of public procurement, there is also a wide field of action for rewarding those companies that demonstrate greater contribution to sustainability and the common good. The introduction of such an orientation in public procurement can be made from different types of intervention: introducing points associated with the level of contribution to society society in the evaluation criteria of bids in the tender processes or including social and environmental clauses in the conditions specifications.. Public procurement can be a powerful factor in transforming the business world. Both community and Spanish legislation le permit the use of such clauses. At this point, and in Spain's case, just as the Spanish strategy mentions it is worth touching upon the fact that upon carrying out the transposition into Spanish law of the 2004/18 Directive of the European Parliament ament and Council, of 31st March 2004, on the coordination of procedures for the 16

Common Good Balance: See Economy for the Common Good Go

How can we advance towards a New Economy?

award of contracts for works, supplies and services, the legislature extended the possibility of inclusion of such clauses in any public contract. Therefore, the legal framework framework allows it, it is now necessary to take advantage of the open space. As regards the public support of business projects at national or international level, they are also likely to be valued according to their contribution to society, those that provide greater value being rewarded (through the awarding of extra points).

"Sustainable enterprises more favoured by the public sector" With regard to trade, free movement and marketing of products and services of European companies with greater value will be facilitated. Imports of goods and services and investment by companies from countries outside the European Union will be facilitated, giving priority to those that provide more value to society, which will in turn transmit these approaches to other markets mar and geographical contexts. Promoting business innovation in sustainable development Promoting sustainability, improving social conditions and improving the common good in general are areas that could be greatly enhanced through innovation. Innovation with a social approach, technological development related to sustainable development and entrepreneurship oriented to the common good can be promoted by public policies through awards, grants or contests. It departs from the recognition that there is need for new systems, approaches and ways of operating that address the challenges of a sustainable susta society.

"Promoting innovation in sustainable development" Both the public and private sectors have great potential to promote innovation aimed at improving public goods. Supporting research and providing funding for development are key elements. eleme Priority to responsible and long-term long term financial investment in sustainability The orientation in a dominant form of finance and credit to those investments that provide more value to society is a very important transformation vector. And the public sector sector can support this process substantively. Gaps in the performance of the financial system have been at the root of the financial crisis that has affected millions of people and organisations worldwide. It has become clear that we need a system that works well, avoids negligence and consequentially crisis, and is the engine of a New Economy. Socially responsible investment (SRI) brings together the funding that is invested in assets that provide greater value to the environment and society. Currently, about a third of institutional investment servess ESG criteria17 both in Spain and at global level reaching 50% in Europe. Regarding the banking system, financial regulatory principles set out in the Basel Accords (G20) try to ensure adequate monitoring of the functioning of the banking system. If the constitutions c of the countries stipulate that the common good is what must prevail in our societies, why not include in 17

ESG: Environmental, Social and Environmental

How can we advance towards a New Economy?

these agreements that financial services that contribute to further that goal should be favoured. In this regard, the obligation of financial finan institutions to analyse non-financial financial risks of operations should be included giving priority to those that contribute best to sustainable development and to the common good and eliminating those that produce the opposite effect. Another possibility is the inclusion, in addition to the financial risks, the extra-financial extra financial risks in the banking solvency rules (through the Central Bank) to force banks to take into account in their reserve fund. We can also give priority to banks lowering capital requirements regarding credit risk coverage. This is already planned for in the CRR Basel III rules in the case of SMEs but it would be appropriate to extend it to other entities such as the social economy and for all entities that promote the common good perhaps with different reduction coefficients according to the degree of contribution entities.

"Advantages for financial investment more beneficial to society" Tax deductions can be applied to the banks on tax payable on deposits giving priority to those t entities with the greatest volume of loans granted to companies that contribute more to society. Regarding Investment Funds those that integrate ESG principles can be rewarded, through the granting of tax advantages for Funds investing in beneficial projects from a social and environmental point of view (socially responsible investing). This requires establishing the obligation for investment funds to report on the contemplation of social, environmental and good governance and that the reports are audited audited (including publication of the carbon footprint of portfolios). The implementation of fiscal measures is doable also in the segment of SMEs for example through the Autonomous Communities in income tax. There is also room for improvement in the stock market. market. Sustainability indices are working and directing investments increasingly towards sustainability. However, there are challenges to improving the credibility provided by the rating agencies. For this it would be more convenient for it to be the publicc administration that paid the rating Agency which would contribute to greater objectivity (and the administration could charge companies that want to be qualified)18. Also, from the point of view of the orientation of private investments, income tax cuts in the capital gains of SRI funds. It is interesting to highlight the growth of new investment initiatives (the so-called so called impact investing) associated with a direct social purpose. It is a set of instruments such as Social Risk Capital Funds, Microfinance Funds, Social or Green Bonds and Impact Bonds. At European level financial regulation has great projection potential as it encourages a more sustainability-oriented, oriented, responsible and long-term long investment. For its part the conditions that must be met to ensure that the portfolios meet ESG criteria could be established with greater clarity. In this way, national authorities could certify their compliance and establish a seal of quality (or its corresponding label based on colours following the proposal of the Economy for the Common Good). ood). This would be a big step for the promotion of ESG investment since it homogenises the European market.

So the conflict of interest that exists today between the rating agencies and companies that are qualified and who pay them would w be avoided.

How can we advance towards a New Economy?

The European Commission has just launched its roadmap to create a single single capital market among the 28 Member States in order to make available to European businesses, and especially SMEs, a wider range of funding sources, according to Jonathan Hill, European Commissioner for Financial Stability and Financial Services. No doubt doubt this is a unique opportunity to integrate elements mentioned in this document. In the Spanish context we are significantly behind the EU although more active in recent years. And there are many areas in which progress could be made and that are independent of European legislation. Issues such as promoting greater transparency of the Funds, it would be convenient if control authorities where the funds are registered in countries countries such as the Comisi贸n Nacional del Mercado de Valores (National Securities Market Commission) in Spain could certify the quality of those who report having taken into account SRI criteria. The Social Security Guarantee Fund could also be made compulsory19 investing in SRI and the inclusion of tax stimuli to insurance companies or pension funds. It is also possible to encourage alternative investments such as Venture Capital favouring those that invest in companies of a higher value to society. Although there have been important steps in this direction, to definitely implement the financial transaction tax on capital movements (FTT) to circumvent financial speculation avoiding an abusive movement of capital favouring revenue for the purposes of the common good and making longlong term investment more attractive. It is also necessary to avoid all derivatives and in general all speculative investments or those that generate market distortions like for example in the price of essential commodities (wheat, rice) in the lives of millions of people. Finally, it is necessary that competition due to the attraction of foreign investment in the European Union, does not carry with it the possibility of the existence of opaque countries with transnational companies benefiting iting from an overly favourable tax treatment. Integrating social and environmental risks in the cost of capital At present the cost of capital very rarely reflects the true cost of doing business. Many of the negative side effects of economic activity are not taken into account in the calculation of investment and, nevertheless, they are risks and subsequent costs that society will ultimately take on in the long term, either by environmental degradation, climate change or by the problems of inequality.

"Integrated social and environmental risks in the cost of capital" To change this reality and integrate the costs more fully there are different possibilities. The development of a new market such as in the case of carbon emissions rights or the regulation reg of an existing affected market (regulation of the use or exploitation of a natural area); through the requirement of quality standards; or with the application of taxation or subsidies. In all cases action from the regulators is necessary. In the case case of fiscalism, activities attached to negative externalities for society would be taxed whilst for activities that integrate approaches from a favourable social and environmental point would benefit from tax breaks or subsidies.

France already has this fund established with SRI criteria.

How can we advance towards a New Economy?

Improving Good Corporate Governance The rules and recommendations of the Corporate Governance defines the relationship between the governing body of a company, its Board, its shareholders and its stakeholders. It provides a framework for the setting of targets targets by the company and determines the means to achieve and 20 monitor compliance . The reflections on the origin of the crisis identified deficiencies in corporate governance. The OECD's recommendations are the benchmark in this area also being flagged, apart from by its members, by the G20 countries. In September 2015 the OECD launched a review of its guidelines with interesting developments like: -

Greater transparency in the information issued to shareholders and stakeholders can learn how the company works, the practices carried out, the risks incurred and the results obtained. Greater possibility of participation of shareholders and stakeholders in corporate governance by defining multiple mechanisms for this. Possibility of stakeholders, including employees employees and their representatives being able to communicate their concerns about illegal practices to the Board. Importance of non-financial financial information while establishing the voluntary nature regarding the information. The relevance of the application of ethical standards by the Board, taking into account the interests of stakeholders. The need for a sufficient number of independent Consultants to ensure objectivity. Assigning independent Consultants the overseeing the quality of non-financial non financial information. informatio Establishment of information on remuneration, market quantities without jeopardising the long-term term viability of the company and with approval procedures.

These guidelines call for greater transparency, greater risk control and better supervision by a Board oard with some independence. In the European Union steps have been taken in the direction of ensuring that certain issues related to maintenance of the legitimate interests of stakeholders are taken into account. Stemming from a Green Paper in 2011, subsequently subsequently an action Plan was launched for the improvement of corporate governance based on strengthening transparency, greater shareholder participation in the supervision of society and the support of the growth and competitiveness of companies, simplifying cross-border border operations also for small and medium enterprises. Along these lines, from the European Union several directives have been published in recent years involving a number of steps to improve corporate governance (e.g. on non-financial non financial reporting for large companies, shareholders' rights, wood import controls; soon traffic of minerals). It concerns important advances that are a result of the consensus among social actors but with many challenges ahead. To advance further it would be a great contribution to establish a format or formats for non-financial financial reporting reporting and extend it to all kinds of businesses (not only large ones that constitute a small sample in the universe of European companies).

Definition according to OECD

How can we advance towards a New Economy?

Spain has responded to these developments in corporate governance transposing those directives or guidelines at the national ational level through legislation or recommendations. The legal aspects of Good Corporate Governance are primarily regulated by the Corporations Act21 that introduced as a novelty the delegable power of the Board of Directors of the approval of a CSR policy. policy It is also necessary to mention the Code of Corporate Governance for Listed Companies published recently by the National Securities Market Commission in Spain that although voluntary recommendations include the principle of 'comply or explain' so they can can have a high level of incidence. In this code recommendations ecommendations such as listed companies publishing a report on their CSR policy on their websites in time for the annual general meeting have been included, and that the monitoring of compliance with the rules of corporate governance, internal codes of conduct and CSR policy being attributed to one or being split between several committees of the board. Also the new Code aims, among other objectives, to strengthen the role of shareholders' meetings in monitoring itoring corporate governance pointing out as basic principles, transparency in premium policies, transparency in the functioning of the Boards and removal of barriers which restrict the exercise of attendance and participation on an equal footing. With regards regards to the effective involvement of the holders of capital and especially minorities, it lowers rates so far in force so shareholders can exercise their rights (3%), which provides more opportunities for the development of shareholder activism. It also extends xtends its powers to approve corporate transactions of relevance; it determines the separate voting of issues such as the appointment, re-election re election or removal of directors and voting statutes, it regulates the handling of conflicts of interest and the shareholders' shareholders' right to information. It also allows greater control over corporate policy of remuneration of the management bodies and senior management of the company. In this way it avoids a conflict of interests of executive compensation linked to short--term m goals with the interests of the shareholders of longer duration, including the obligation to the General Meetings of Shareholders to make them more transparent.

BOE Law 31/2014. Corporations Act to improve corporate governance.

How can we advance towards a New Economy?

The new code recommends the establishment of a policy of communication and contacts with shareholders, reholders, institutional investors and proxy advisors as well as the need to report clearly to the board on the degree of compliance with the recommendations of the code itself. The supervision and control of the company is also reinforced by strengthening strengthenin the powers of the internal audit committee whose functions are key to shareholders, investors, and other stakeholders. This commission should ensure the proper functioning of information systems and internal control. Among other things it should check that that the companies have a risk management unit (recommending the analysis of financial and non-financial non financial risks, among other operational, technological, legal, social, environmental, political and reputational re ones-). A unique aspect of the Spanish scope is is the measure that the organic law of the Penal Code has included in its latest reform regarding extended criminal liability to legal persons (not just physical). This is considered a strong element of support from managers of companies (now criminally responsible) ponsible) for Good Corporate Governance. In the event that the European Union would take steps in harmonising criminal codes, it would be interesting to consider its effect on improving corporate governance.

"Improving Good Corporate Governance" Corporate governance is a fundamental element that regulates the performance of companies, particularly in regard to their relationship with government and with workers and their representatives. This improvement also involves improving effectiveness and accountability a in the monitoring of Spanish companies through the relevant supervisory bodies of the Stock Market, the Bank of Spain, Insurance companies and Pension Funds. But it is necessary to go further. Below, some potential advances that could be envisaged en are mentioned, distinguishing between what could be legislated and what could be included in future codes of good governance. There are some aspects which could fall under the law of limited liability companies: -

Modernising the conception of the role of business in the Capital Companies Act, including the commitment to long-term long term value creation (against conceptions that include short-term short and speculative investments). The mandatory reporting on social and environmental impacts including aspects such su as the contribution to the common good and the OSD22, and the level of integration of the cost of negative externalities. The obligation to extend the rules of capital companies to subsidiaries in foreign countries even though they have weaker laws. The obligation to analyse and limit the financial and non-financial non financial risks of the company. Mandatory transparent remuneration of directors for all types of businesses.

On the other hand, there are some aspects which could include a new revision of the code of good corporate governance as recommendations: -

Establishing management and staff incentives linked to extra-financial extra financial objectives.

Objectives of Social Development supported by the United Nations.

How can we advance towards a New Economy?

Including that executive pay should be about ceilings that bear some proportionality to the least paid worker23.

So far some ideas on improving corporate governance to make progress in line with a greater risk control and greater attention to non-financial non financial aspects have been mentioned. However, the most important change in the field of corporate governance may come from the fact that workers or part of them are involved in the ownership of the company. It thus seeks to introduce the worker's perspective by involving strategic decisions of the company. There are many ways, but it is clear that companies where workers participate in ownership are more involved and more responsible about their performance and development. It is a way of re-humanising re humanising businesses, avoiding them only being viewed as commodities ignoring that they are also keepers of the wishes and aspirations of many people. ple. In participatory companies it is more likely that they operate in a more harmonious manner with society. Integrating the values of contribution to society into school and university education Progress towards a New Economy conomy needs a social base impregnated with its values. It is a key element that school and university education transmits the value of success associated with contribution to society, caring for the planet, business ethics, success not only economically associated but also associated with social and environmental development.

â&#x20AC;&#x153;Integration Integration of the values of contribution to society in formal educationâ&#x20AC;? The implementation of a New Economy Economy requires new generations to integrate this perception of business success more closely linked to the idea of contribution to society. It is a cultural change that must be promoted from the base and permeate all educational levels. Regulating inclusion in product information to consumers of information on the quality of provision of social and environmental value of the company that produces it Another key aspect ct for the implementation of a New Economy Economy is inclusion in products and information services to enable the consumer to know companies' degree of contribution to the common good. Along these lines, the proposal of the Economy for the Common Good through labelling based on colours (5) is very interesting, reporting on the contribution contribution to the common good of the company. The different colours allow consumers to quickly visualise the level of advancement of the company's contribution to the Common Good which would be measured through the Common Good Balance. Through the QR code, the the consumer could access the balance in detail.

"Regulating the availability of information on products and services to the consumer"

Limitation of maximum salaries: several proposals of civil society exist advocating that the establishment of maximum remuneration should not exceed x times that of lower paid workers (10 to 20 times). The lack of control over corporate governance govern and its disassociation with workers has allowed situations that can give huge disproportionality disproportionality between employees and employeeemployee management. It is also necessary to avoid that in times of crisis it is given that executive pay increases while personnel adjustments ad are carried out.

How can we advance towards a New Economy?

Likewise, the public sector can play a more active role in promoting responsible consumption, guiding the consumer in the exercise of choice of purchase. This will contribute to enhancing public awareness of the he ability of consumers to advance the economy towards sustainability.

Especially supporting the social economy, SMEs and ethical banking Social economy is the part of the current economy that is more aligned with the overall objectives of the New Economy. omy. It refers to the set of organisations that prioritise people over capital, including organisational forms such as cooperatives, mutual societies, foundations, associations and social enterprises. E is creating jobs. SMEs generate more jobs than One of the biggest challenges of a New Economy large companies. Also social economy contributes significantly to employment and also with special social orientation. This sector in Europe already reaches 14 million jobs24. But in order to grow and expand they need a facilitated and adapted access to financing. In this regard the commercial banks have a major challenge which ethical banking has taken up playing an increasing role. In the face of lack of funding, social economy implements different solutions, including in the use of undistributed profits or the granting of voluntary loans from cooperative members to the cooperative itself. However, it deals with remedial actions, requiring an overall improvement of access options to finance. The origin of the crisiss and the responsibility of the financial system have led to a lack of credibility and trust in it. The existence of ethical banking is an opportunity to provide an alternative to customers and extend the funding dedicated to promoting activities that add value to society. States can promote the emergence of intermediary financial institutions, such as cooperatives or ethical banks which provide funding to social economy through a favourable regulatory regul environment.

"Supporting the social economy, SMEs and ethical banking" Also from the public sector support of services for the development of this type of economy can be increased (access to training, guidance, provision of financial guarantees, contributing to funds, etc.). 24

Social economy and social entrepreneurship - Social Europe guide - Volume 4 (29/04/2013)

How can we advance towards a New Economy?

How to support these economic agents is diverse: from the inclusion of clauses in public financing initiatives or contracts with different mechanisms. Obviously, the implementation of a fiscal policy that lowers the tax burden on these entities is a strong ng way to encourage the development of social economy organisations. So is fiscally rewarding donations to these entities. There are cases that allow uniting resources from the sector for the sector itself. The application of a levy to benefit cooperativess that nurtures a fund to support new cooperatives is a way to selfself finance the sector. From the private sector there are also several possibilities (commercial loans, business angels, venture capital of social impact, donations, social investment, crowdfunding, etc. Integrating social and environmental elements in foreign investment promotion Many countries have institutions supporting the export and internationalisation of companies. Spain has institutions (ICEX, COFIDES) and powerful instruments of support in this area. In addition, due to the crisis, the internationalisation of Spanish companies is a process which has undergone a process of significant acceleration in recent years. Policies and instruments of support to the internationalisation of businesses make up an important area in terms of ability to influence the public sector in foreign-stock stock enterprises. Promoting social and environmental criteria in the the action or implementation of Spanish companies abroad can contribute to improving the impact of such companies locally in the countries also contributing to improving the image of Spain. In addition, many countries are already including social and environmental mental clauses in public procurement.

"Integrating social and environmental elements in foreign investment promotion" At European level, the companies working in the international arena constitute elements that are or should be induced by the culture and values of our continent in terms of ethical principles and contribution to society. In this sense, European support policies must support the foreign trade companies that best embody those values and objectives. For example, bilateral agreements or regional trade signed by the EU should include preferences for these businesses (through (t social and environmental clauses or reference to ethical standards in trade regulations); or the inclusion of social and environmental criteria in the analysis of projects to receive financial support through the instruments of support for internationalisation. internati Regarding investment agreements, it is necessary to raise a balance between the legitimate interests of the countries of origin of the investments and the development goals of the host societies (correspondence between the recognised principles of responsible responsible investment and the terms of the Investment Agreements). Also to include references in the Investment Agreements to compliance with regulations and international commitments which go beyond the national legal framework when it is not sufficiently developed. developed. And the application of customs duties or reductions to companies that meet certain sustainability requirements or common good.

How can we advance towards a New Economy?

From

civil society

Developing the culture of responsible consumption aimed at brands with social and environmental value The choice in the process of acquiring a good or a product or service for the consumer is one of the most important transformation vectors of the economy. And this responsibility lies with the citizen, i.e. the consumer. But for this vector to be effective will and information is required. To develop the will it is necessary to expand the culture of responsible consumption and orient the purchasing power to brands with social and environmental value. And here, in the process of consumer awareness, civil society iety has an important role complementing the efforts of public sector through educational programs and communication mmunication actions. With respect to information, public sector does have the expertise to standardize the inclusion in products through standardised labelling that enables discrimination against companies according to their contribution to society.

â&#x20AC;&#x153;Expanding the culture of responsible consumptionâ&#x20AC;? consumption The provision of consumer information labelling in compliance with sustainability criteria of the companies that produce the products, is another area with a high capacity for impact. The aim is to enable citizens to have enough information to take part in responsible consumption, encouraging consumers to favour those companies that show compliance and greater commitment in relation to production with sustainability criteria and social responsibility. As the consumer prioritises the companies that better contribute, we will be making reality sustainability as a major factor ctor of competition in the market.

How can we advance towards a New Economy?

Make the realities based on a New Economy come true If this reflection focuses on structural bases that can foster the expansion of the New Economy, the civil society in many occasions leads and encourages encourage changes, carrying on initiatives and adopting new business forms that open pathways. The extension of volunteer integration of the New Economy principles to different initiatives and organizations by citizens committed with collectivity or global development development is currently one of the major factors of transformation. The proliferation of the New Economy proposals quoted in the point 2. and their materialization in citizensâ&#x20AC;&#x2122; concrete initiatives which act on other assumptions represent the spearhead of a transition towards a new way of understanding and interacting in the economic sphere. As long as the configuration of an operation framework of economic activity as the one advocated in this document is not a reality, the extension of civil societyâ&#x20AC;&#x2122;s initiatives in this sense represent an important catalyst of the New Economy.

How can we advance towards a New Economy?

4. The role of the public sector in the promotion of a New Economy The public sector has as a major role in promoting a New Economy. Economy. It is important due to the fact that the Spanish Constitution, as is the case in most Constitutions, states that public administration should serve the public interest and, therefore, it becomes constitutionalised principle. The statement that "The Public Administration objectively serves the general interest" interest" is contained in Article 103.1 of the Constitution and is the axis on which the actions of the Administration should gravitate. This objective to pursue the public interest must be present and guide any action by the Administration. According to the synopsis of the Spanish constitution, the performance of the Administration should be guided by the pursuit and prosecution of public interest that applies, which will prevent - imperatively from article 103.1 of the Constitution - its diversion from its appropriate purpose. Public administration has great potential as a facilitator facilitator for the extension of the New Economy. E This work begins by noting that the economic system needs corrections to positively orient the public interest. As mentioned above, liability liability before the general interest corresponds to the public sector by constitutional principle and nature. It is clear that the public sector needs to forcefully play this role as guarantor and promoter of the general interest of the common good. In a society where private interests often undermine the public interest, the public sector must exercise its power protected by the constitutional mandate to establish e mechanisms, incentives or regulations necessary to preserve it.

It is necessary to strengthen the concept of the public sector mission in favour of society

"Having experienced, after the political disasters of the twentieth century, and after the financial crisis of the early twenty-first first century, that in the course of our history there can never be an absolutely ideal state and there can never be a definitive order of freedom, postmodern man lives in a twilight space, too lazy to take gratuitous or lasting action, often fleeing from almost all responsibility or ethical behaviour, overly attentive to himself and indifferent to everything that transcends him "25. To overcome this fairly widespread perception, it is necessary to strengthen the concept of the public sector mission in favour of society taking on the challenge of guiding the economy e towards sustainability, employment and the common good. It can also be a substantial source of meaning for the public official, often conditioned by a multitude of interests misaligned with the common good.

Paragraph from the article by Andres Contreras Serrano "El Bien de Todos" (The Good of All). Blog Society Gov 2015

How can we advance towards a New Economy?

The economy needs positive regulation an andd the public sector has the responsibility and the possibility of establishing it implementing the necessary incentives. In many cases it is already doing this but greater ambition is needed. Regarding the role of the European Union and National States In the framework of the European Union, both European institutions and national states have relevant vant capabilities to drive the New Economy. E It is necessary to highlight the role that the European Union is developing to improve European competitiveness in this global world of ample trade integration. While competence in economic matters are the responsibility of the states26, the European Union provides the framework for economic governance (and is responsible for ensuring compliance) just as defining the strategy st of competitiveness and European growth (Europe 2020) being the role of national states to develop necessary27 reforms in each country to make it reality. The Europe 2020 strategy is based on knowledge, innovation and sustainable and inclusive development. opment. It is a consistent strategy that addresses the problems of loss of European competition in bidding for a knowledge-based knowledge based society proposing direct growth toward the production of goods and services with higher added value market and promoting sustainability. sustai Moreover, Europe is hosting interesting initiatives such as advances in CSR, circular economy, advances in corporate governance, etc... However, high global competition can make these European objectives seem truncated if measures are not takenn in line with laying the foundations foundations for the transition to the New Economy. E Actually, we are at a crossroads. We as Europeans have two choices: compete in the world market (and the 2020 strategy is probably the best strategy for this) or compete in the global market with this strategy but in parallel lay the foundations found for the transition to a New Economy. conomy.

26 27

Except monetary policy In the Spanish case it is specified in the Reform Programme (2013-2016) 2016) of the Ministry of Economy and Competitiveness

How can we advance towards a New Economy?

The first alternative can turn out more or less well for us as Europeans since the global problems mentioned in the introduction will continue to grow grow and their effects continue to worsen and affect us. The second alternative includes laying the foundations for a more inclusive economy which allows global dynamics to be positively redirected. Europe is still a power with the capacity to continue setting trends in the world. There is still time to do so, but we have to start taking steps. The question here is whether Europe - and above all Europeans - are willing to have their hands tied by market forces and assume the fate provided by global dynamics dynamics or, conversely, have something to say and face reality to be more than passive 'objects', that is, to build our future and that of future generations. For such a response, people and institutions more aware of reality are required, more alert, campaigning gning more in their own environment (all gestures and actions, however small, count), more committed to change, interested in what is theirs, locally but at the same time globally, who don't assume so easily that there are no options, but that it is possible possib to contribute -and and be architectsarchitects of a different market and society. In order to move forward, the European framework constitutes a great opportunity. Europe is well positioned to propose the measurement system of business activity including social and an environmental parameters, and to propose a code of standardised information to consumers. For their part, the national states (and also sub-national sub national authorities), upon wielding powers in economic policies, have broad leeway to t actually go about making the New Economy conomy reality. The following table shows the orientation of governance initiatives (for which the European Union is particularly well positioned) and national policies and potential instruments that national and subsub national governments can deploy deploy and use (and in some cases are already being implemented):

How can we advance towards a New Economy?

POLICIES

ORIENTATION

GOVERNANCE Improved framework of corporate governance Consumer information

INSTRUMENTS Business measurement system (economic, social and environmental) Company quality info labelling system

Transparency and regulatory functions Economic

Promotion of the most sustainable companies

Incentives for the most sustainable companies E.g. fiscal advantages Social clauses in public procurement Regulatory updates (Companies Act) and of Codes of Good Governance

Promotion of financial investments with a Tax incentives for SRI focus on sustainability Positive regulations Quality certification Innovation promotion

Support programmes Financing facilities

Social economy promotion

Incentives Access to financing

Internationalisation with more social and environmental value

Eligibility criteria Social and environmental clauses Additional points in process of evaluation

Employment

Professional reorientation of workers

Training plans

I+D

Facilitating transition to high-value high and New Economy

Support programmes

Education

Tax deductions

Sustainability, Innovation, Common Good Methodological and curricular and Global Citizenship Education improvements

Source: Own Elaboration

How can we advance towards a New Economy?

5. Some actions to facilitate the change In the previous section many initiatives that different actors can perform are mentioned. The involvement of all actors is essential for progress. However, as mentioned below, the public sector should uld undertake a series of actions that are considered key to advance the transformation of the economy, structured into the following phases: Phase 1) Laying the groundwork -

Establishment of the measuring system (e.g. Common Good Balance) Establishment of the information system for products and services (e.g. Colour system of the Economy for the Common Good) Public information of the new measurement and information systems

Phase 2) Application of incentives rewarding voluntary action -

Establishment and implementation of measurement and information systems (rewarding companies that do it and more to those who get better results)

Phase 1 constitutes the definition of the measurement and information systems. Phase 2 contemplates the promotion of those companies comp that voluntarily ily assume the precepts of the New Economy conomy granting them certain advantages. The transition to the New Economy will take time and require several stages. In any case, for the success of the process we require the awareness of society who who will be responsible for bringing into play the two most important transformation vectors: the inclusion of incentives from the public sector and the purchase decision of the consumer. A key aspect in this process is the definition of the measurement system and the type of labelling The public sector should (which should be unique and straightforward for all undertake a series of actions that kinds of products and services) that can be used u are considered key to advance the by businesses and which enables the introduction transformation of the economy of incentives from the public sector. What is interesting is the proposal of the Economy for the Common Good based on one simple labelling with different colours associated with a scoring system that would ld be different according to the business sector. The labelling system is based on a series of colours that show the progress of the company regarding its contribution to society. In itself this system is coupled with a stimulus for continuous improvement of the company. During Phase 2 of voluntary action, the application of incentives from the public sector can have a significant ripple effect. Also, depending on the degree of consumer awareness, shoppers may give preference to goods with this labelling, and thus demonstrate that they inform on their contribution to society.

How can we advance towards a New Economy?

In parallel, the implementation of voluntary actions and measures by companies, municipalities, associations, universities, etc., can lead to the extension of incentives and ways of gradually g changing perceptions and will help educate society. The most important step is the extension to most products and services of the consumer information system. If this is achieved, the foundation for the New Economy will have been laid. With this system in place, the consumer will be able to discriminate the quality of companies' products and not only by price, the public sector will reward companies that contribute more to society, or even establish a company quality threshold to be able to participate partic in public procurement. As a further step, when the new way of doing things is sufficiently widespread, we could consider moving to a Phase 3 which would lead to the implementation of the legislation required for reporting in a general way in the triple triple economic, social and environmental dimensions. Once implemented at European level, a similar process could be carried out internationally. At first the labelled Europeans products on the market would coexist with other unlabelled products. If the system em proves beneficial to society, the public sectors of other countries may enter the system and, depending on the degree of awareness of their company, generate new expansion processes.

How can we advance towards a New Economy?

6. Obstacles and justification to advance in the implementation of the the New Economy If the option for the New Economy conomy evidently seems something positive for society, one might ask why processes with greater interest from certain areas are not supported. In this regard, here are some arguments that are used so as not to be involved in the process of advancement ncement of the New Economy conomy providing some answers by way of counter-arguments: counter Argument 1 It could have a negative impact on European competitiveness Europe is at a crossroads, facing an uncertain future. With low growth rates and rising unemployment reaching unacceptable levels in some countries, it has to choose how to position itself in a market that is marked by other countries such as the emerging ones. With cheaper manual labour, these countries are growing at a much faster pace, experiencing rapid industrialisation processes. Meanwhile, Europe, with labour costs and more ample social protection has difficulty to compete. It seems that the alternatives for Europe involve two main options, strengthening its competitiveness by providing higher quality and value products, differentiating from production in emerging countries to remain competitive in the global market; and transitioning to a post-industrial post and services economy based on knowledge and information technology, exploiting opportunities for the development of a more sustainable economy. As discussed below, global awareness of the need to adjust production and infrastructure development in a more sustainable way increases, generating a future worldwide market with enormous possibilities28.

To the extent that European products integrate the mark of sustainability they will be better positioned to take advantage of future market opportunities.

Fortunately, from the European Commission they are already ready making efforts in this direction, promoting this transit through pilot programs that promote market sustainability, efficiency through technology and increased competitiveness in the global market through a differentiation strategy by region. If Europe ope wants to take advantage of sustainable market opportunities that are increasing globally, it is necessary for its economic activity to be imbued with that approach. To the extent that European products integrate the mark of sustainability they will be better positioned to take advantage of this market's opportunities. So precisely European competitiveness takes its chances in what effectively is produced with higher quality standards integrating social and environmental aspects. Moreover, this economic approach is more aligned with European values. 28

In September 2015, in the United Nations almost all countries of the world committed to the Objectives of Sustainable Development.

How can we advance towards a New Economy?

Although global economic processes condition the European market, due to its size it is also able to influence the global market. And it is doing so and should do so more to highlight this competitive difference. ence. Europe has set, and is in position to do so in the future, the quality standards of products and services. This is convenient to ensure its competitiveness and at the same time, it is Europe's responsibility to contribute to an economy with more stringent stri social and environmental standards. Argument 2 The consumer is not sufficiently aware It is true that the price factor is very important in consumer choice. However, consumer sentiment is changing. Access to information and social networks are accelerating the process of awareness rapidly. Society is tired of pollution, outraged by the abuses, becoming increasingly aware that its power of purchasing choice can can be a key element in the transformation of the economy. This is evident by the increasing number of initiatives ives that seek to provide consumer The consumer is becoming information. On the other hand, surveys on the increasingly aware that his/her level of support for the market economy indicate power of purchasing choice can that the support of the developed countries has declined relative to that of developing countries. be a key element in the The perception of the problems lems that the economy transformation of the economy. leads to - such as those mentioned in section 1 - is making global awareness of the need to introduce certain corrections grow. Since the prospects in the medium to long term are not very positive unless change vectors are introduced, it is plausible to think that in the future consumers can increase their level of awareness of these issues. Argument 3 Label confusion exists It is true that there is a profusion of fundamentally ecological certificates according to the type of products that finally generate some confusion among consumers. Some more widespread than others, all try to inform consumers about the ethical standards achieved by these products. To solve this problem and facilitate consumer choice, it is necessary to highlight the proposal from the Economy for the Common Good, which advocates a universal colour code that would provide standard, simple and direct information on the level of contribution to the common good of the company that manufactures the product or provides the service.

A universal colour code would provide standard, simple and direct information on the level of contribution to society and facilitate the choice for the consumer.

How can we advance towards a New Economy?

Information System for products and services proposed proposed by the Economy for the Common Good The colour band shows the level of progress of the company towards greater contribution to the Common Good. The score comes from the implementation of the Matrix of the Common Good:

This universal code is compatible with all certificates. For each product type what would just need to be defined would be the criteria to be taken into account when establishing its correlation with the colour code. They could initially also coexist so that the progress already carried out was not lost. Argument 4 The market does not value the quality or care of the social and environmental aspects in the presence of the price This work supports the inclusion of incentives from the public sector in the market (favouring companies that generate positive impacts at the expense of those producing generating unwanted effects). These incentives, which would last for some time until the market integrated them in a widespread manner, allow companies' negative externalities to be integrated. So the extension of an economy corresponding with the differential factor of European competitiveness would be encouraged, based on quality and socio-environmental socio environmental value as mentioned above. The public sector has numerous resorts to introduce these incentives into the market. As in the numerous examples cited in this study, the public sector can make the market reward companies and products that provide more value to society. And this must be done not only because it is best for society but because it is also more profitable. The public sector has numerous Failure to do so would mean society ends up resorts to introduce incentives paying the costs of the negative impacts of into the market companies via citizen taxes. It is reasonable for the public sector to introduce corrective elements required for the costs of environmental preservation and social contribution ntribution to not be unfavourable elements of competition but rather the opposite. Moreover, beyond the markets induced by public procurement, albeit it is true that being competitive in price is usually related to reducing environmental and social standards, standa there are companies able to have a proper balance in terms of quality business practices and products and the sale price. In many cases ways to produce with similar costs but with very different impacts at social and environmental level exist. The possibility possibility of discriminating according to the quality of the company for the labelling of products, will allow consumers or the public sector, to assess up to what price they are willing to pay to contribute to an economy with a better impact on society. 39

How can we advance towards a New Economy?

In the future, once the information system was extended, the public sector could consider the exclusion of companies that did not meet a minimum valuation of contribution to society. Argument 5 Preferential markets in the era of globalisation are difficult difficult to maintain

It is about making possible for both the public sector and consumers to exercise their preferences guiding the economy towards the interests of society

In the era of globalisation there are many preferential markets resulting from the current configuration of world trade. Right now 1,400 preferential trade agreements exist on a bilateral basis, with new megaregional agreements and general rules at multilateral level (WTO)29. In them preferences for individual countries and products are established, stablished, focusing on the reduction of tariff and non-tariff tariff measures. Preferential markets are a widespread reality in the era of globalisation.

What is proposed here positions itself as a preferential market on another plane and consists in enabling both the public sector and the consumer to bring into play their preferences guiding the economy towards the interests of society. Its maintenance over time will depend on the different actors (mainly consumer and public sector) finding interest in promoting promoting the products and services of most value to society. Ultimately, a determining factor for the extension and maintenance of the New Economy is the degree of awareness and commitment of the actors. Argument 6 The New Economy means including new restrictions on economic freedom of individuals and will end up slowing down the economy The New Economy does not limit the economic freedom of individuals if it is understood in a positive way. On the contrary, what is needed needed is more entrepreneurs, more businesses that create jobs, more innovation, but at the same time these companies are required to contribute more positively to society and the environment. Individual economic freedom but with a proper balance between economic, nomic, social and environmental variables. This system does not have to slow down the Economic dynamism will be economy that will depend on the dynamism of fostered, giving priority to those individuals but involve restrictions for companies with practices which entail additional costs to who contribute most to the society society. And at the same time it will favour those who integrate and promote the best practices. What will be promoted somehow is economic dynamism but with effects that provide solutions solutions to the problems of society and do not aggravate them. The recent crisis has had a devastating effect on many families, it has highlighted the defenders of the unregulated free market. Markets have to be regulated and regulation should protect consumers mers and the economy towards the benefit of society. Only with appropriate public policies is it possible to orient market effects to the interests of society. Now, this is a kind of regulation that should not be confused with the bureaucratic obstacles of of some economies that complicate the business climate. 29

Like the Generalised System of Preferences which grants terms to Least Developed Countries

How can we advance towards a New Economy?

Argument 7 There are many lobbies that block progress Unfortunately this is so and in many cases they are just the vested interests of certain corporations often responsible in collusion with the public sector for certain initiatives not prospering.30. This element is difficult to ignore. Here civil society is playing an important role of complaint. But it is not enough and requires the involvement of everyone. From the position of each individual it is possible to take certain steps, preventing certain other ones, so that the common good will prevail over individual interests. Undoubtedly, progress in accountability and transparency, which are key aspects in this regard, can hinder the action of these power groups acting from the shadows in general co-opting co the interest of society.

It is necessary to put the common good ahead of private interests

In this issue the political sphere and the public sector have an enormous responsibility. If they are able to keep up being a counterweight to private excesses in the general good, the process of alienation of citizens will slow, avoiding instability in the economy and creating new opportunities for people. It is also necessary to take into account account the global forces that are already affecting the economic system itself and will continue to do more and to a greater extent. And being immersed in the knowledge, information technology and communications revolution, we inexorably move toward a more distributed, tributed, open, collaborative and networked society31. From evolution difficult to predict, it is clear that the traditional capitalist economy will be buffeted (as is becoming a reality in many sectors) by new production methods and access to goods and services. services. Faced with this process, you can resist it or try to exploit its benefits and orient them (giving priority to those who contribute more) to the general good. The size and strength of the coming changes seem to recommend the second option.

According to Piketty, free market capitalism generates wealth concentration and when the State does not intervene to redistribute redistri it, it produces inequality and undemocratic ndemocratic oligarchies. See his book: "Capital in the Twenty-First Twenty First Century" 31 According to J. Rifkin

How can we advance towards a New Economy?

7. Some ideas for Europe that Spain can make its own The world needs to rethink its sources of growth and distribution of wealth. On the one hand, growth, especially in post-industrial industrial societies, is smaller and a lot of employment is destroyed reaching unacceptable le levels of unemployment. On the other hand, the traditional capitalist system generates great inequality that undermines growth itself. Employment must become an economic priority. It is necessary to ensure GDP growth leads to higher employment. This premise pre is not clear and probably will be less so in the future32. And generating wealth is of little use if it remains in few hands, negatively affecting the economy33. Only then will healthy, less expensive and more sustainable societies be built. The European Union has the constitutional mandate to promote a social economy approach Europe can apply its regulatory as mentioned in point 1. From the commercial and capacity at European level to a strategic point of view, the New Economy is greater extent to promote changes interesting to contribute to positioning Europe and at national levels take advantage of changes arising from new technologies. Moreover, the New Economy also coincides more with European values. It is appropriate to recall here the words of of Robert Schumann, one of the fathers of the European Union: "Beyond each country we recognise more and more clearly the existence of a common good, above the national interest, that common good in which the individual interests of our countries are based on and confused." We must recognise that Europe is fulfilling its role as a catalyst for structural change. In line with the study the ambitious Horizon 2020 program is defined, to transition to a knowledge-based knowledge society and low carbon economy, policies related to the promotion of corporate social responsibility mentioned in the introduction to this study and the recent communication on circular economy with a vast program of actions to promote it in the coming years34. But there is still a long way to go. Europe is developing an ambitious strategy to improve competitiveness associated with the transition to a knowledge and service-based based society but can go further to guide these efforts in line with the demands for a more inclusive and sustainable economy.

The European Union has the constitutional mandate to promote a social economy approach

The changes listed in this paper contemplate actions at national and supranational level. Certainly the European Union, which is already involved, is especially well positioned to drive these changes. 32

According to J. Rifkin According to Stiglitz in 'The Price of Inequality' the rise in high incomes has a lower impact on consumption than the rise in average and low incomes. The problem is not inequality which will always exist, but disproportionate inequality. 34 On 2nd December 2015 the European Commission Commission adopted a new ambitious package to boost Europe's transition towards a circular economy. 33

How can we advance towards a New Economy?

In addition, theree are proposals to reform the Single Market which represent an opportunity to consider the basis for a different economy35.

Economy need to be reinforced at Therefore, the vision and action to move towards the New Economy European level by promoting regulatory updates. Set out below are the main actions that would allow an advance towards a more inclusive and sustainable economy, strengthening the actions that the services of the European Commission are already involved in as has been mentioned throughout the study:

Establishing a framework for measuring companies' performance in three dimensions. Defining the criteria for companies' measurement in their social and environmental dimensions in the different economic sectors.

Establishing a standard for the labelling of all products and services so that consumers can easily discriminate the level of contribution to society of each company.

Establishing guidelines or recommendations concerning the economic policies of the Member States on incentives or instruments instruments that can be implemented to advance the New Economy.

Introducing proposals into the reforms of the Single Market36 the approach to this work needs to be more appropriate in order to better respond to the needs and concerns of the people.

Continuing too support the transition to a knowledge and service-based service based society: -

Promoting R&D oriented to making the most of the advantages of knowledge-based knowledge society. Training employees in new skills related to the knowledge-based knowledge based economy and a more service-based economy. Guiding the public investment necessary to facilitate the transition to the knowledge and service-based based economy.

See Commission Communication of 28 October 2015: â&#x20AC;&#x153;Upgrading the Single Market: more opportunities for people and businessâ&#x20AC;?.

How can we advance towards a New Economy?

Promoting general tax policies and incentives to guide the economy towards this transformation towards sustainability and common good policies.

Setting regulations both in the economic and financial system to prevent speculation and prioritise activities that generate economic, social and environmental value.

Supporting especially the development of the Social Economy and its business and organisation models.

Developing low carbon economy relying on renewable energies and enabling and taking advantage of, promoting the necessary regulatory changes, the enormous potential to change Europe's energy matrix through the production of domestic domestic renewable energy converting citizens into clean energy producers.

Avoiding that in the process of trade negotiation between the United States and the European Union, ion, it leads to a lowering of the existing European standards, or undermines the potential future progress towards the New Economy and the consequent integration processes of social and environmental aspects of products and services. That is to say, makingg it possible now or in the future for states to favour companies that contribute more and better to society37.

Avoiding through improved supervision, real estate and financial bubbles that weaken the economy, introducing more regulation in the financial system and directing it to improve the financing of the real economy.

Ensuring implementation of the adopted measures for a balanced treatment between Member States as regards the tax treatment of multinationals.

In short, itt is necessary to move towards sustainable and inclusive growth. The proposals for the New Economy conomy illuminate the horizon with new possibilities. And global forces are causing major changes. Our responsibility is to take advantage of the changes and proposals to advance towards societiess that better serve the people and the environment. Fernando Varela 38 39

With measures such as those outlined in this paper. In any case, avoiding the signing of treaties such as the TPPI may involve actually undermining the efforts of the European Union towards a more social and sustainable economy. 38 Fernando Varela de Ugarte is an Industrial Engineer Doctor Doctor specialised in sustainability, private sector and development. He directs studies and technical assistance for Multilateral and Bilateral Agencies. He has worked in research on Business and Development with several think tanks. Contact: info@newwayssustainability.org 39 Thanks for their opinions and comments to: Francisco Javier Garayoa, Jesús de la Morena, José María Vera, Érika Rodríguez, Juncal Baeza, Laura Alcaide, Mélanie Romat.

How can we advance towards a New Economy?

"For the emergence of new models of progress, we need to change the model of global development, which involves thinking responsibly about the meaning of the economy and its goals, to correct its dysfunctions and distortions". "It is simply about redefining progress. A technological and economic development that does not leave a better world and a higher quality of life cannot be considered progress". "Only behaviour can be considered ethical in which economic and social costs arising from the use of shared environmental resources are transparently recognised and fully borne by those who benefit, and not by others or by future generations"40.

Quotations extracted from Laudato SĂ.

How can we advance towards a New Economy?

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This work has been carried out by the New Ways Sustainability initiative. Contact: info@newwayssustainability.org www.newwayssustainability.org