Economist Mazzucato leads pioneering SDG tax alignment project for Basque ESG investors and policymakers

The government of the province of Bizkaia (Biscay) in the Basque Country in northern Spain is taking advice from influential economist Professor Mariana Mazzucato to align its tax system with its commitment to achieving UN Sustainable Development Goals (SDGs) as part of a partnership fostered by Basque ESG investors.

Earlier this year the Bizkaia Government (Diputación Foral de Bizkaia) signed a partnership with the UCL’s Institute for Innovation & Public Purpose (IIPP) founded by Mazzucato to jointly explore a sustainable way out from the Covid-19 crisis using the SDGs as drivers of the recovery.   

The project has crucial input from local ESG investors in the Basque Country, which has traditionally been a breeding ground for responsible investment in Spain. 

Jon Recacoechea, Head of ESG Investments at Fineco Banca Privada Kutxabank, told RI that there is a great interest in the output of Mazzucato’s ongoing work with Bizkaia, as it has implications for the use of SDGs in their portfolios. 

The project focuses on rethinking economic value, one of the main messages in Mazzucato’s work, for example her famous book The Value of Everything.

There are also elements in the project with Basque policymakers that resonate with other of her acclaimed works, The Entrepreneurial State: debunking public vs. private sector myths where she advocates that value creation is a collective process that involves not just corporations.

The Head of the Bizkaia Government, Unai Rementeria, said that economic growth cannot be achieved at any price, particularly in light of the Covid-19 crisis, and thus a tax system aligned with the SDGs is key. 

Koldo Atxutegi, in charge of strategic projects at Bizkaia’s Government, told RI that next year a “Living Lab” will be set up to put into practice the outcomes of Mazzucato’s work, taking advantage of the size and scale of the Basque Country. 

Atxutegi said the work so far is focused on identifying which companies can be considered SDG-aligned and thus be entitled to tax credits after being certified as such.

Atxutegi said the project is unprecedented and hopes it can inspire innovation for more public-private partnerships elsewhere.  

For more on the topic of tax and SDGs, read RI’s Room for one more? Why Tax Justice should be the eighteenth SDG.