In the realm of European politics, the spotlight is firmly on high energy prices and ambitious energy transition objectives. As the European Parliament elections approach, a projected shift to the right has ignited intense discussions about EU climate policy. Right-leaning Members of the European Parliament are advocating for a more measured approach to the Green Deal, citing concerns about the proposed 2040 targets in context with voters’ cost-of-living worries.

The article condenses insights from Workiva's 2024 ESG Practitioner Survey, revealing professionals' readiness to tackle challenges posed by the EU's Corporate Sustainability Reporting Directive (CSRD). Despite concerns about data accuracy and regulatory adaptation, a significant number of companies, including those not mandated by the CSRD, plan to align their reporting with the new standards, driven by perceived benefits like competitive advantage and improved decision-making. The survey underscores a growing emphasis on investing in technology for ESG initiatives, with an eye on data management and the potential of generative AI to streamline sustainability reporting. Overall, the findings illustrate regulation as a catalyst for innovation in corporate transparency, with companies increasingly embracing assured integrated reporting as the new norm.

The European Parliament's recent approval of the Corporate Sustainability Due Diligence Directive (CSDDD) signifies a significant step towards formal adoption by the European Union, aiming to establish a legal framework for corporate responsibility in supply chains. The directive, also known as CS3D, mandates due diligence obligations on companies operating within the EU or with significant business ties there, encompassing environmental and human rights concerns. Despite its initial proposal undergoing substantial dilution during intense negotiations, the final version reflects compromises to accommodate varying interests. Notably, the directive's scope extends beyond direct corporate actions to encompass subsidiaries and supply chain partners, potentially holding both EU-based and non-EU companies liable for sustainability breaches.

Europe's finance industry remains steadfast in its commitment to environmental and socially responsible investments (ESG), despite political pressures leading some U.S. counterparts to backtrack. European investors prioritize sustainable funds, supported by robust regulations like the EU's Taxonomy. Though facing challenges, including regulatory adjustments and slight dips in investor demand, European financial firms maintain focus on ESG implementation, underscoring a continued dedication to advancing ESG principles in finance.

The European Climate Risk Assessment (EUCRA) highlights the growing threat of extreme weather events across Europe, including heatwaves, droughts, wildfires, and flooding, which are expected to worsen despite optimistic climate scenarios. Urgent action is needed, especially in Southern Europe, where challenges in agriculture, health, and coastal resilience are pronounced. With 36 major climate risks identified, over half require immediate attention, including safeguarding ecosystems, mitigating heat-related health risks, and enhancing infrastructure resilience. Collaboration among the EU, member states, and local authorities is crucial to bridge knowledge gaps and implement effective policies, better preparing Europe for the challenges of climate change.

The European Council approved legislation to slash greenhouse gases, aiming for a 500 million-tonne CO2-equivalent emissions reduction by 2050. Heralded as the world's most ambitious, the rules target a complete phase-out of hydrofluorocarbons (HFCs) by 2050 and a 95% reduction by 2030, restricting the use of F-gases in favor of climate-friendly alternatives.

The European Parliament passed an anti-greenwashing law (593-21) to combat deceptive environmental claims. Pending EU Council approval, the law focuses on clearer product labels, restricting generic environmental claims, and promoting sustainability. Member states have a two-year integration period. The EU Commission also proposed a "Directive on Green Claims" for additional consumer protection.

The EU recently passed a new “eco-design” framework that will redefine the sustainability within product development for the future.

In a recent development, 40 Members of the European Parliament (MEPs) proposed a motion to reject the European Sustainability Reporting Standards (ESRS). These MEPs advocated for simpler, less burdensome sustainability disclosure rules. The Parliament ultimately voted against this motion, with 359 votes against out of the 631 MEPs. On the same day however, the European Commission did announce plans to delay the ESRS implementation timeline.

The EU took a pioneering step on October 1st by launching the world's first Carbon Border Adjustment Mechanism (CBAM), a system designed to impose CO2 emissions tariffs on carbon-intensive goods imported into the EU.

Yesterday, The European Commission adopted a detailed set of reporting regulations for the transitional phase of the Carbon Border Adjustment Mechanism (CBAM). Set to begin on October 1, 2023 and extend through the year 2025, this transitional phase aims to lay the groundwork for the CBAM's full implementation.

This week, the European Supervisory Authorities (ESAs), which includes the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA), have proposed amendments to extend and simplify sustainability disclosures for financial market participants under the EU's Sustainable Finance Disclosure Regulation (SFDR). These proposed amendments come from the ESA requesting a review of the SFDR's indicators for principal adverse impact (PAI) and financial product disclosures.

Today, the European Union countries gave their final approval to adopt a new regulation that will require a 100% reduction in emission from new cars and vans. The EU policy will require all new cars sold to have zero CO2 emissions from 2035 and 55% lower CO2 emissions from 2030, versus 2021 levels. This is in line with the European Commission’s “Fit for 55” roadmap to cut GHG emissions. However, Germany won an exemption for cars running on e-fuels, leading to concerns that traditional combustion engine cars could still be sold beyond 2035.

On Tuesday this week, the European Parliament formally approved a new law that will effectively ban the sale of new combustion engine cars in the European Unition as of 2035. This new law has been approved in hopes to combat climate change and accelerate the shift from petrol and diesel cars to electric.

Recently, the European Union added shipping to its carbon market. What this means, is now shipping vessels will be required to pay for their emissions, putting a financial incentive on being more environmentally conscious and forcing the entire sector to begin reducing emissions.

This deal which was agreed to by lawmakers and negotiators from the 27-country block would all to the carbon market all carbon dioxide, methane and nitrogen emissions from maritime voyages within the EU.

The European Commission proposed new rules on Wednesday that will require the EU market to have all packaging be fully recyclable by 2030. These new rules are a way to reduce packaging waste through increased recycled content in plastic drink bottles and these rules set targets for reuse of single-use materials used for things such as online deliveries.

Last month it was announced that the EU was set to become a front-runner in global sustainability reporting standards by formally adopting the Corporate Sustainable Reporting Directive (CSRD). On Monday, the EU Council announced that CSRD was officially adopted and approved. This new directive will expand on the already existing Non-Financial Reporting Directive (NFRD). The hope is that CSRD will introduce more detailed reporting requirements on companies’ impact on the environment, human rights and social standards.

The EU has become a front-runner in global sustainability reporting standards by formally adopting the Corporate Sustainable Reporting Directive (CSRD). With CSRD officially adopted, this new directive will expand on the already existing Non-Financial Reporting Directive (NFRD). The goal is that CSRD will introduce more detailed reporting requirements on companies’ impact on the environment, human rights and social standards.

The week, The European Council agreed on a proposal that revised the Energy Performance of Building Directives. These revisions will ultimately make it so that all new buildings should be zero-emissions buildings by 2030, and all existing buildings will be transformed into zero emissions buildings by 2050.

The week, the European Union passed a ruling that is requiring all phones and small devices such as cameras and tablets, to have a USB-C charging cable. This law has been in the works for about 10 years, starting initially Brussels after consumers complained about having to switch between chargers and the cost affiliated with having a different type of charger for each device. This law was passed in hopes to not only make life easier and most cost effective for consumers, but also to be more sustainable at the end of the day.