A huge moment for business: European Green Deal

After much anticipation and ambitious promises from the incoming EU Commission President Ursula von der Leyen, the European Commission today announced the content of its European Green Deal. No one should underestimate the importance of this announcement. All mid to long term strategies of most sectors operating in the EU will need to be reviewed.

The European Green Deal sets out overarching objectives. These are fundamental as they will inform EU legislation and policy going forward. They include: achieving climate neutrality by 2050, mainstreaming sustainability and promoting “nature-based solutions”.

All EU legislation is potentially up for review to ensure alignment with the newly defined objectives. These are to be enshrined through a European Climate Law to be produced by March 2020. The European Commission will also present a comprehensive plan by October 2020 to increase the EU’s greenhouse gas emission reduction target for 2030 to “at least 50% and towards 55%”.

The measures expected to be introduced on the back to the Green Deal will have dramatic impacts on all sectors and industries operating within the EU. In particular, areas of priority for the European Commission include:

• mainstreaming sustainable finance and investment;
• supplying clean, affordable and secure energy, building and renovating in an energy and resource efficient way;
• shifting to smart and safe “zero-emission mobility”, with initial measures to introduce new air pollutant standards and a new sustainable transport strategy by 2020;
• consideration of extending the EU ETS to incorporate the maritime sector and road transport emissions, while reducing the free allowances allocated to airlines;
• eliminating all sources of pollution, to include concrete measures to address air and water pollution and a strategy on sustainable chemicals;
• preserving and restoring ecosystems and biodiversity;
• promoting a sustainable industry for a circular and climate neutral economy;
• introducing a healthy and environmentally friendly food system through reforms of agricultural and food regulation; and
• working with stakeholders to identify and remedy incoherent related legislation.

Comment

This is an important moment for business in the EU. The EU Commission has set out very clearly the direction of travel. Current and future business plans will need to have regard to this. The magnitude of change may take time to sink in and, no doubt, there will be bumps along the road, but few will be able to argue that due notice was not given.

The full text of the EU Green Deal can be found here.