This blog reflects the speech delivered by Monique Goyens at an event marking the 30th anniversary of the Consumers and Environment category of the European Economic and Social Committee, on 1 October 2021.
The COVID-19 pandemic has been for many of us a wake-up call: our economies and citizens were highly exposed to detriment because of a non-precautionary approach towards the challenges that our markets and societies face. It is high time we stopped burying our heads in the sand. The regulatory framework of our market economy, based on freedom of market players and trust in market-based solutions fails to deliver the long-term sustainability that our societies expect. Let’s look at the two biggest challenges of our time: the digital and green transformations. How to take consumers onboard?
Our lifestyles are unsustainable
Indeed, our lifestyles call for pandemics to develop, for environmental disasters to strike, for our democracies to be under pressure, and in parallel, for economic and societal consequences of these disruptions to be of immense magnitude.
And the first ones to suffer from the dark sides of our lifestyles are the most vulnerable: the less affluent, the less educated, the elderly or the younger, the less healthy, people with disabilities, populations in developing countries, those living in remote areas.
No way back to business as usual
The COVID-19 crisis has given rise to numerous policy initiatives to protect the lives of the population and the stability of the economy. Many of these temporary policies are now being phased out. However, it is crucial that our societies and markets do not return to business as usual. We hear political slogans like “build back better” or “leaving no one behind”. Beyond those buzzwords, it is imperative to be concrete, focused, and deliver on the ground to the people of this planet.
Our civilisation is facing an emergency, both environmentally but also when it comes to our democratic systems. This is why we need our leaders to be ambitious and take courageous measures in disruption with the previous plaster approach.
Digital transformation – urgent need to restore humanised interactions
Digitalisation brings convenience to most of us and we can celebrate these. However, the dark sides should be put in the spotlight, and measures should be taken to put human interactions at the centre of our civilisation.
Chat bots? No, thanks
More and more of our interactions take place virtually – look at the explosion of e-commerce, and we have “conversations” via chat bots: automated decision-making and servicing might be cost-effective, they can be a major source of frustration for its recipients. Collectively, it can put our mental health at risk. Companies would be well advised to test business models where a human is at the (help) desk and policy makers should consider introducing safeguards and introduce, at least in certain circumstances, the right to talk to a (real) person.
No to 100% digital societies – analogue might be the new black
Digital exclusion is a reality for those who have no access to connection for whatever reason (financial, infrastructure) or who lack the skills to optimise the use of IT tools (age, education). On top of that, moving to a fully digitalised society leads to a high dependency on an infrastructure and on processes that are managed by private companies. Two questions need to be asked: do they protect us adequately against cyber vulnerabilities; do they deserve our trust?
Anyone who has been in a shop when the electronic payment system went down is aware of the immediate disruption that hits, not speaking about the life-threatening consequences in case of exposure of health and transport systems. Digital markets have also demonstrated an increase of fraud and of unsafe products online, with less opportunities to prevent and control. Given the speed of the process (traders come and go, they can’t be tracked), its virtuality (you don’t really know who or what is behind a name) and its globality (your conversation partner/trader can be on the other side of the planet) – any enforcement of rules is currently an illusion.
It is therefore vital that our regulatory system safeguards the analogue solution, while providing for its providers to have a viable business model.
The green transition needs each of us to succeed
The green transition is a must – and it will be costly to all. This is not a project for the few, but one that needs to deliver to all of us. Therefore, it is key that the green transition is a just one. In other words, its burden must be fairly distributed, protecting the less affluent families against falling into poverty. Here are a few ideas:
- The sustainable option must become the most affordable one: the right price signal needs to be set because price is a major driver of consumer choice: e.g., make train travel cheaper and get rid of privileges of fossil fuel in air travel.
- Consumers need to be informed and protected against fake news, so that they stay away from fake sustainable options. This is particularly true when it comes to sustainable finance.
- Information will not solve it all, actions will. To convert consumer willingness into concrete change of behaviour, policy makers and market players need to roll out ambitious assistance and support programmes. This would lift as many barriers as possible (e.g. retrofitting your house, what electric car is best for your household, how to calculate the return on investment for more energy-efficient products).
Putting consumers front and centre
To secure success in the long term of both the digital and the green transformation, we need at EU level to roll out a protective and empowering policy and regulatory strategy at EU level, that provides for a strong and a genuine consumer-centric policy strategy. This means that:
- EU policy makers and enforcement authorities from different sectors need to get out of silos as of the design phase of their policies, built around the consumer needs.
- Market-based solutions as default option are a thing of the past: they are not fit to cater for the urgency.
- Consumer policy should be inclusive and acknowledge diversity: no policy should be based on the average consumer; it should be designed with vulnerable consumers in mind, but also reach out to the young – they will need to live with the decisions, so let them inspire the policies…
- Consumer policy does not stop at legislation, it goes all the way to enforcement. Consumer policy must both provide public authorities with enforcement powers with teeth and enable consumers to obtain effective redress in case of damage.
Covid-19 was the wake-up call. Now, it is up to policy makers to wake up and smell the coffee!