Keynote at the Economics Summit at Warwick University
24-26 January 2025
Simonetta Sommaruga
Former President of Switzerland
Let me extend my heartfelt thanks for the invitation to your wonderful university. I am delighted that the students themselves have organised this summit – and really well organized!
It is an honour for me to speak at this university, which was recently named one of the best universities in the world for sustainability. Congratulations!
I wanted to contribute to your sustainability ranking: so I came here all the way out of Switzerland by train.
Sustainability and diversity need leadership
Today, I will speak about two interconnected topics: sustainability and diversity.
Both require leadership. Now more than ever. And they need you, dear students, the changemakers of the future. That is why I am pleased, to share with you some of my long-standing political experiences from the direct democracy of Switzerland.
Although progress in sustainability and diversity has been made in recent years, we are still not on the right track. Worse, we are currently experiencing a significant backlash.
- The new U.S. president has once again withdrawn from the Paris Climate Agreement, the most important global climate treaty, and he is now also dismantling DEI programs.
- McDonald’s has cut its diversity goals.
- Walmart, the world’s largest retailer, has decided to stop using race and gender as criteria to improve diversity when selecting suppliers.
- The CEO of Meta has recently called for more “masculine energy” in companies. This is surprising, considering that almost 90% of newly appointed CEOs in big companies are men – an abundance of “masculine energy” one might think – but apparently still not enough for Mark Zuckerberg.
All of this has happened in just the past few weeks. These setbacks are alarming.
But are they surprising? I don’t think so.
Increasing resistance to enormous transformations
Major societal and economic changes have always been accompanied by backlashes.
This is not a new phenomenon.
These counter-movements are often driven by the fear of potentional losers – and by short-termin profit motives.
When you add to this the fact, that decarbonisation- and diversity-measures begin to have an impact and show signs of success: the resistance will grow even stronger. I believe this is what we are currently witnessing.
Loser, decinling profits and the increasing attractiveness of decarobonization
Decarbonization affects us all very directly. Fossil fuels are involved in every apple we bite into, and in every piece of clothing we wear. Most of us heat our homes with oil or gas, drive petrol-powered cars, fly with kerosene, run machines with diesel, and rely on data centres that consume enormous amounts of electricity, much of which is produced using coal, oil and gas.
So it is understandable that the changes associated with decarbonization triggers fear.
Moreover, every major transformation creates “losers.”
I will never forget an encounter I had at a public climate protection event with a gas station employee who yelled at me: “Climate protection may be fine, but if everyone switches to electric cars, no one will come to my station, and I’ll lose my job. Who will look after me then? Do you even care about my future?”
She was right. Policymakers must address the needs of affected people early on. Otherwise, those individuals will align themselves with those who oppose decarbonization for profit.
The oil and gas industries earn astronomical sums and will do everything possible to maintain status quo.
Do you know how many oil and gas lobbyists were officially accredited at the latest UN Climate Change Conference? Almost 1’800 lobbyists were there just to make sure that their ‘big business’ carries on.
I think that opposition to decarbonization is also intensifying because many solutions are now available and attractive:
- Electromobility works; electric cars are becoming cheaper, and batteries lighter.
- Alternative heating systems save a lot of money.
- The price of solar panels has halved in the last year alone.
In short, decarbonization has become increasingly attractive, which is exactly why the oil and fracking lobby is working to undermine it.
Loser, declining profits and the increasing attractiveness of diversity
Fears, profit motives, and the positive impacts of gender equality also play a central role in the backlash against diversity.
Diversity has its losers too, primarily men who benefit from the gender and ethnicity monocultures in the centres of power in politics and business. Women are catching up; first in education and gradually – although very slowly – at the top levels of companies and politics. While equality is still a long way off, the increasing presence of women is already having a measurable impact.
Studies show that decision-making processes change when women make up just 30% of a board. Dialogue- and leadership- culture shift, more attention is given to environmental issues and increasing emphasis on governance. And yes, sexist jokes lose their appeal and sexual harassment becomes utterly unacceptable.
Not only women, many men as well welcome such changes, but there are also losers. Losers are particularly men whose self-confidence is rooted mainly on the devaluation of women. They feel uncomfortable and threatened by female presence, which is why they fight against equality and diversity.
How leadership works
How do we overcome this resistance? What kind of leadership is needed in polarised societies to advance sustainability and diversity? As a politician, I followed three crucial principles to take concrete action and achieve progress:
1. One step forward.
2. Learn from defeats.
3. Integration is crucial.
One step forward
So my first principle is “One step forward.” This is how I tackled the issue of pay inequality.
In Switzerland, women earn an average of 18% less than men. Half of this disparity cannot be explained by education, experience, or position. It means that women earn nearly 9% less than men, simply because they are women. This is a scandal – in Switzerland or anywhere else in the world!
I wanted to address this, but from the very beginning, I faced strong political resistance:
resistance from those who denied that wage inequality even existed,
resistance from those who feared that equal pay would be too expensive for them.
Resistance to political change often follows a similar pattern:
First: Deny the problem.
Second: Distract from the problem
Third: Try to divide society
Fourth: Create maximum confusion and
Fifth: Fight any solution.
Opposition to equal pay followed a similar scenario:
- First, opponents denied that pay inequality existed.
- Second, they questioned the data, arguing that wages cannot be compared.
- Third, they deflected attention, claiming there were more pressing issues for women, like childcare.
- Fourth: they finally acknowledged the problem but rejected all solutions I proposed, saying the solutions went too far, they were not feasible, not efficient, too expensive, etc.
- Fifth, they proposed their own solution, which, however, did not meet scientific standards.
- Eventually, and despite their resistance, Parliament decided on an initial improvement:
- large companies in Switzerland must carry out an equal pay analysis within 4 years. This was a small step considering the scale of the problem.
And then I faced another problem: For many women, this improvement did not go far enough. They saw the parliament’s proposal as an affront and wanted to reject the law. Had they done so, the entire proposal would have failed. I managed to prevent this rejection because I am convinced that progress in social and political matters is often achieved through small steps.
So, after five years of political struggle, here is what I achieved: medium and large companies in Switzerland must now conduct pay equity analyses and communicate the results of these analyses to their employees. It is a modest improvement, but an important one. Because now we can plan the next step. Alongside equal pay, equal opportunity is also central.
Today, I am the President of the internationally active Equal-Salary Foundation, based in Switzerland. The foundation certifies companies that can prove that women and men not only earn equal pay for equal work but also have equal opportunities in hiring, training, and promotion. This rigorous quantitative and qualitative assessment leads to a positive change in the company’s leadership culture and overall interaction – as confirmed through conversations with many CEOs of certified companies. And this is exactly what we need when we strive for equal opportunity.
The EQUAL-SALARY certificate therefore goes further than the current law in Switzerland.
For me, this additional step is important because pay inequality is also an expression of the culture that prevails in a company. It’s a matter of dealing with each other, of unconscious biases, of processes that follow certain patterns and always favour the same people.
That’s why a change in the management culture is necessary to achieve a real transformation; which is in the interest of everyone: because diversity and gender equality is not just a women‘s issue: it is also a question of better economic performance.
By the way, at the Equal-Salary Foundation, we have developed a scientific method to certify equality on the basis of ethnicity. This is a critical issue, especially in the UK and the US, and it rightfully demands attention—one that we hope will continue to grow in the future.
Learn from defeats
My second principle is, to only briefly grieve defeats and then focus on learning from them.
I will show you how with the example of the CO2-law.
The Swiss parliament had decided on measures that would halve Switzerland’s CO2 emissions by 2030. These measures affected the areas of heating, mobility, and industry. There was a referendum on this law, led by opponents with a strong campaign: throughout the campaign the focus was on a politician’s grandmother who could no longer afford her heating bills. Opponents threatened that parents would no longer be able to drive their children to daycare, because gas would be too expensive, and they claimed that young people would no longer be able to travel by airplane because the law imposed a 30-Euro fee per flight ticket.
Eventually, the population voted and rejected this law.
I was very disappointed, and so were all those who had fought for years on this law.
For a few days, the mood was very bleak. But then I decided to find out the reasons for this rejection, so I could learn from it.
In fact, at that time, I received calls from several environment ministers abroad. They wanted to know why the people of wealthy Switzerland rejected a climate protection law when we had so much technical potential for good solutions. Switzerland could have exported its climate innovations and benefit from it!
I concluded that people rejected the law, because they felt “punished” by the climate protection measures: young people felt punished when flying due to the flight ticket fee. In rural areas, people felt punished because petrol would become more expensive, and they depended on cars. Homeowners resisted because they feared that heating with oil and gas would become more expensive, and they couldn’t afford ecological alternatives.
My lesson from the rejected proposal was: climate protection must be socially acceptable! We must support people – and the economy – on the decarbonization path. People should not feel punished.
For the economists among you, I’ll make a brief digression on incentive taxes with full reimbursement. Economically speaking, incentive taxes – like the CO2 levy on oil or petrol – are very efficient. However, they hardly ever reach the desired effect – namely more climate protection. Why is that? Well, either the incentive tax is high enough to have an ecological impact – but then it is not socially acceptable. Or the incentive tax is low enough to be socially acceptable, but then its ecological impact is unsatisfactory.
Coming back to the climate law, I then presented a new version of the law. As often in Switzerland, there was another referendum launched by the opponents. But this time, the population voted in favour of the proposed law because it now included measures to support the population and the economy on the decarbonization path: people would receive advice and financial support from the state when replacing their heating system; start-ups developing innovative solutions would be funded by the state; electromobility would be encouraged by additional charging stations, and night trains would be sponsored so that young people may travel in an eco-friendly way.
Integration is crucial
The two previous examples show that even in very controversial and polarized political areas, you can achieve something by involving people, by taking them on board.
Before drafting a new climate protection law, I spoke with those who had fought against the previous law. I wanted to hear their suggestions and include them – or rather: integrate them.
And it worked quite well.
Leadership in the sense of “I go ahead, and you follow me” doesn’t work here. Integration is key: you must plan and implement big transformations together with the people, with the economy – not against them.
Dear students
You are receiving an excellent education at your universities. You will take on important roles in your professional career, bear responsibilities, and lead people. You will be decisive in addressing the major challenges and in developing solutions that serve the whole population and not just the few.
The prerequisite will be, that the population trusts you. And trust must be earned. It doesn’t come by itself. Trust requires credibility, honesty and transparency.
You cannot – and must not – implement everything “in one day.” You need a strategy and lots, and lots of tenacity and endurance.
And you cannot win alone. Take people along. Surround yourselves in your leadership positions with strong, intelligent and above all critical people who dare to challenge you. Nodding heads will not get you anywhere. Be open-minded. Debates and challenges are part of what will push you to surpass yourselves, especially if your goal is to reach a consensus.
I know that in the current time, these leadership principles are not as widespread as I wish they were. Today, we see more leaders who want to turn the wheel back – be it on decarbonization, be it on diversity. We see authoritarian, reckless and power-hungry leadership styles. And we also see what the results of these leadership styles are: division in society, tensions, conflicts,
violence, and wars. The resulting suffering falls on the population and nature itself. That cannot be the goal.
That’s why I wish you: become the leaders who unite and inspire others to rally around sustainable solutions and meaningful change. You are the changemakers of the future – the future relies on your vision, on your action, and on your commitment to inclusive leadership.
Thank you!
