The European Union (EU) has storied history when it comes to green commitments. In general, it is fair to say that the bloc is fairly ambitious in terms of environmental targets. The EU and all its member states signed and ratified [1] the 2015 United Nations Framework Convention on Climate Change (better known as the Paris Agreement). In 2020, the European Green Deal was adopted [2], with the ultimate goal of being the first climate-neutral continent, and specific stated goals including:
- No net emissions by the year 2050.
- Decoupling of economic growth and resource use.
- No person and no place left behind.
This included all 27 members agreeing to cut greenhouse gas emissions by 55% compared to 1990 levels by 2030.
The COVID-19 pandemic caused extensive economic crises in Europe (and the rest of the world), however green commitments in the bloc received a shot in the arm in the form of the Recovery and Resilience Facility.
Figure 1: EU flags. [7]
EU Backs Down
The European Commission is the group (formally a “College”) of commissioners, one of which is appointed by each member state. They elect a president, currently Germany’s Ursula von der Leyen. The job of the commission, among other things, is to propose and enforce legislation. Contrary to popular belief, the process is reasonably democratic. Commissioners are not elected by the public, but they are appointed by the European Council, which comprises leaders who are elected within their individual countries. Furthermore, legislation must pass a vote from the European Parliament, comprising publicly elected MEPs.
At any rate, the European Commission is now set to “simplify” the green regulations, reportedly [3] in an attempt to protect the economy within the European Union. The three specific laws affected are those that mean companies have to take increased responsibility for their environmental impacts. These are:
- The Corporate Sustainability Reporting Directive.
- The Corporate Sustainability Due Diligence Directive.
- The EU Taxonomy.
These reporting rules required companies to report extensively on the environmental impact of their operations and their supply chains. Simplistically, the change of heart is seen as a recognition that the environmental protections that had been prioritised as part of the Green Deal may just be too expensive for the European economy to accommodate.
Reasons for the change
There are, of course, countless reasons that realising the bloc’s green ambitions are challenging to achieve. Among these are:
- The economic impacts of the pandemic, rescue packages notwithstanding, and the war in Ukraine.
- Government instability in European states, including Germany and France.
- A general rise in populism and political leaders that do not prioritise environmentalism, perhaps most prominently (although not exclusively) in the USA.
The European Union is also at a critical moment in terms of the EU-Mercosur trade deal, which has been signed [4] but not ratified. This is an agreement that would lower tariffs and make customs checks simpler [5]. However, opposition to ratifying the deal comes in part from states that are concerned their farming industry will suffer, due to ‘unfair’ competition since farmers outside of Europe may not be subject to the same environmental standards, which are expensive to meet. There could, therefore, be strategic reasons to loosen the grip of green regulations on industry.
Companies keen to stay the course
Whilst we commonly read about pressure from industry to reduce the burden of environmental regulation on them, such sentiments are not universal. It was reported in November of 2024 that more than 60 companies [6] had urged the European Commission to stick to the Green New Deal. These companies included:
- Patagonia.
- IKEA.
- Nestlé.
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References
[1] European Council of the European Union (undated), Paris Agreement on climate change (link), Europa.EU, last accessed December 2024.
[2] European Commission (undated), The European Green Deal (link), European Commission, last accessed December 2024.
[3] Gros, M (November 2024), Brussels to slash green laws in bid to save Europe’s ailing economy (link), Politico, last accessed December 2024.
[4] European Commission (undated), EU-Mercosur agreement (link), European Commission, last accessed December 2024.
[5] Josephs, J (December 2024), EU tries to get closer to South America with trade deal (link), BBC News, last accessed December 2024.
[6] Jessen, J (November 2024), Companies Urge EU to Stick to Green Deal Commitments.
[7] Guillaume Périgois (July 2020) from Unsplash.com. Last accessed on 2nd January 2025. Available at: https://unsplash.com/photos/blue-and-white-flags-on-pole-0NRkVddA2fw
