Dear reader,
Welcome to Publyon’s monthly Sustainability Newsletter. This month’s edition starts with a short piece on what the EU is doing to support the development of Green Tech. We then look into the latest updates on the EU’s Corporate Due Diligence Directive and what they mean for your business. And last but not least, we speak to Richard Gardiner of the World Benchmarking Alliance about the future of supply chains and their transition to more sustainable practices.
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Undoubtedly, 2024 is a time of political shift. The upcoming European and Belgian elections taking place in June, are a unique moment for businesses as they provide an exceptional chance to proactively shape the political dialogues and decisions that will influence the forthcoming term in Belgium and the broader EU.
Publyon is proud to introduce you to our Beyond the Ballot series of webinars and reports that will help your organisation to be well-informed about the political developments in Brussels and provide you with guidance on how to effectively take advantage of opportunities stemming from the elections.
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The spotlight
Europe paves the way for green tech revolution with ambitious industrial plan and Net Zero Industry Act
The European Union’s Green Deal Industrial Plan promises a significant leap towards its climate goals, unveiled alongside the groundbreaking Net Zero Industry Act (NZIA). This dual approach aims to bolster clean technology manufacturing and attract substantial investments, driving Europe to the forefront of the green tech revolution.
The NZIA acts as a cornerstone, simplifying regulations, streamlining permitting processes, and offering financial incentives for strategic projects. This creates a fertile ground for investors, enticing them with long-term stability and reduced risks. Additionally, the plan focuses on specific tech areas with high potential, including:
- Hydrogen: Investing in renewable hydrogen production and infrastructure will decarbonize heavy industries like steel and chemicals.
- Batteries: Scaling up battery production is crucial for electric vehicles and stationary energy storage, essential for a renewable energy grid.
- Solar and Wind: Expanding manufacturing capacities for these established renewables is key to powering homes and industries sustainably.
- Carbon Capture and Storage (CCS): This technology captures CO2 emissions from industrial processes, preventing them from entering the atmosphere, and offers potential for negative emissions solutions.
- Biomethane: Transforming organic waste and agricultural residues into renewable biomethane offers a sustainable alternative to natural gas for heating, transport, and power generation. Its inclusion in the NZIA highlights its growing importance in the clean energy mix
These are just a few examples, and the NZIA encompasses a broader range of clean technologies. This targeted approach, coupled with the plan’s supportive measures, creates a compelling investment proposition. Companies can gain access to skilled workforces through dedicated training programs, tap into EU funding opportunities, and navigate a smoother regulatory landscape.
With the green transition accelerating globally, the EU’s comprehensive strategy is a magnet for green tech investments. This not only benefits the European economy and job creation but also sets a powerful example for other regions, fostering a collaborative effort towards a greener future.
Don’t miss out on gaining a competitive edge by being a first mover in the booming green tech market. Reach out to us to learn more and seize this opportunity today!
Policy update
Corporate Sustainability Due Diligence Directive
The Corporate Sustainability Due Diligence Directive (CSDDD) represented a significant shift in the regulatory landscape, particularly for businesses operating within the European Union and those engaged in trade with EU Member States. However, it all turned to ashes during the Member States representatives meeting yesterday.
What happened?
The Belgian Presidency of the Council of the EU faced significant obstacles to reaching a compromise between Member States for a new regulation for overseeing business supply chains (CSDDD). Despite its efforts, the presidency couldn’t gather adequate support from Member States to move the legislation forward through the regular legislative process during its term.
Acknowledging the lack of support, the Presidency stressed the importance of evaluating the situation and exploring options to address concerns raised by Member States in consultation with the European Parliament.
Notably, Germany’s Free Democratic Party played a pivotal role in blocking the legislation. The deadlock within Germany’s three-party coalition regarding the CSDDD influenced the outcome, with Germany indicating its intention to abstain from voting. Furthermore, Italy and several smaller Member States also signalled their intention to abstain. France’s position remained ambiguous, contributing to the uncertainty surrounding the vote.
While negotiators had previously reached a consensus on the Directive in December, final approval from Member States and European lawmakers was still pending. The timeline for adoption before the upcoming EU election in June is jeopardized due to the lack of progress.
What does it mean for your business?
If consensus on CSDDD is not reached by institutions before the upcoming term, it could result in a fragmented internal market and varying national regulations regarding responsible business conduct.
The lack of a unified EU-level law ensuring fair competition would disappoint many companies that have already adopted due diligence procedures in line with international standards. However, on a positive note, it could also afford additional time for companies in the early stages of transitioning.
The Council has a two-week window to reach a fresh compromise before the directive becomes ineligible for adoption by the current Parliament.
Expert interview
In this edition of Publyon Sustainability Newsletter, we are delighted to present an exclusive interview with Richard Gardiner, Head of EU Public Policy at the World Benchmarking Alliance. In the interview, we aim at shedding light on the theme of sustainable supply chains, what does it mean, and what the European Union is doing to tackle the impact of businesses on both the climate and society, including the highly debated Directive on Corporate Sustainability Due Diligence.
Richard Gardiner is EU Public Policy Lead of the World Benchmarking Alliance. He develops and implements strategies to engage policymakers, stakeholders, and partners on the role and impact of corporate benchmarks in advancing the Sustainable Development Goals (SDGs).
The World Benchmarking Alliance is a non-profit organisation that assesses and ranks the world’s most influential companies on their contribution to the Sustainable Development Goals. They publish free and publicly available benchmarks to empower all stakeholders, from investors to consumers, to hold the private sector accountable on the role in building a more sustainable world that works for everyone.
1. Could you introduce yourself in 2-3 sentences explaining your background, what is the World Benchmarking Alliance (WBA) and your role at WBA?
I have been working in EU public affairs since 2010, and I am currently the EU Public Policy Lead for the World Benchmarking Alliance (WBA). In essence what WBA does is it develops and publishes benchmarks which assess 2,000 of the world’s most influential companies, ranking and measuring them on their contributions to the SDGs. Within WBA I am responsible for WBA’s interaction with EU policy makers, as well as connecting key policy discussions in the EU around topics such as corporate reporting with global developments at the UN.
2. How do you perceive the role of government policies and regulations in facilitating the global supply chain transition towards sustainability?
I think that the role of regulation is vital in the quest to a more sustainable planet. Of course, regulation and rules cannot be seen as a silver bullet but what has become increasingly clear is that key targets that have been set around achieving net zero, tackling biodiversity loss and addressing forced labour cannot be fully achieved without regulation playing a key role.
The advantage of regulation is that it sets a minimum legal standard allowing fair competition and a level playing field on which companies can compete. It ensures that there are no laggards pulling down the market leaders and enables the market leaders to further innovate knowing they will not be undercut.
3. What are some effective policy measures or incentives that you believe can encourage companies to adopt more sustainable practices throughout their supply chains?
As a starting point, and indeed as expected minimum, companies should already be aligning with the existing global standards set by the UN guiding principles on Business and Human rights and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct.
There are obviously different national and regional policies being discussed (like the German Supply Chain law and the EU Corporate Sustainability Due Diligence Directive) but already aligning with the OECD and UNGPs will make any further transition to hard laws much more manageable with the major incentive being that these companies will have first mover advantage when more hard law comes into play.
4. We see in recent news that the adoption of a key legislation on the sustainability of the supply chain, the Corporate Sustainability Due Diligence Directive (CS3D) is now in a legislative limbo. A key vote among member countries for the adoption of the text was postponed twice this month, and there is growing speculation that it is increasingly unlikely that the law will still be finalized in this legislative term. What are your views on this stalemate, and how would you suggest policymakers should overcome it?
To be frank, this current stalemate is quite ridiculous and a really worrying example of what we may see coming more down the road on corporate capture and political stubbornness on introducing progressive policies. What is currently at risk is selling out the long-term stability of our economies and societies for potentially some short-term political gains – essentially robbing tomorrow to get paid today. There is very little economic or objective logic for not advancing on CS3D. It has been debated extensively for more than 3 years, and indeed all of the globe’s major companies are bound by the existing UNGP and OECD standards. But a minority of scaremongers have managed to capture the narrative as the window on this legislative term closes.
What I would suggest to policy makers is not to focus on what they think the law will do but to actually think about a sensible and logical application. CS3D will mean different things for different sectors and supply chains. We have seen a significant number of major businesses come out in favour of this law and, to me, there are also ideal partners to work with to make this law workable and beneficial for the EU’s economy.
What I would strongly advise against is seeing the EU’s competitiveness purely in “Euro amount”. Focusing solely on profits will only drive a race to the bottom as each company undercuts each other until there is nothing left. Profits are clearly important for financial security, but they need to be balanced against reputation and the ability to provide clean and ethical products or services that will allow for there to be a planet tomorrow to operate on.
5. Should the adoption of the CS3D move to the next legislative term, and given the potential formation of a right-wing majority in Brussels in the aftermath of the EU elections, what would you expect as an outcome?
All political indications are that CS3D will not move in the next legislative term. We will likely lose the commissioner who introduced and backed it, we will lose the support of the largest Parliamentary party the EPP, and in general we will lose this unique momentum. We have seen this in the past where files get shelved and if this happens to CS3D I feel it will sit in a drawer gathering dust.
6. Indeed, we speak about the changing political landscape in Brussels expected after the EU elections. What role do you foresee the European Union playing after June 2024 in driving forward initiatives aimed at enhancing transparency and accountability throughout global supply chains?
It is widely understood that the EU has led the way globally in trying to introduce progressive legislation on sustainability and it is far ahead of its peers such as the US. That is not to say the EU has got everything right, but I think they have been very successful in allowing for a forum to have these tricky and technical debates about greenwashing, biodiversity loss, tackling emissions. To me the fact we have had these debates in the last 5 years has been a huge success.
However, going forward, the EU will need to address the impact of these discussions and the decisions that were taken as a result. It should not be the case that an EU law prevents a small holder farmer in Africa or Asia from accessing the EU supply chain or being forced to pay more to achieve some sort of EU recognised label. Much of the environmental and social degradation in the world is driven by the EU’s economic power.
Therefore, in the next 5 years, the EU should make sure that not only its transparency and supply chain due diligence initiatives are being adhered to, but that there is adequate corporate accountability to ensure that the largest companies take these rules seriously. This means they should not be passing the so called “burdens” of a given law or policy down the value chain, but they themselves should be using their own economic clout to raise standards throughout their sector.
7. What advice would you give to businesses and organisations like yours seeking to make their voice heard the EU, in particular on the topic of enhancing the sustainability of the supply chain?
It sounds overly simply but you need to come up with solutions, and not just complain about problems and money. The current economic model is propelling the world to what has been described as an “unliveable planet” – so clearly advocating for the status quo should not endear you to policy makers.
Every sector and every supply chain has its own identity and set of challenges but the more upfront and open we are about them, then the more easily we can steer towards finding a workable solution or a pathway to tackling emissions, forced labour, etc. What we need to avoid above all else is what we have now with CS3D – a decision to have a law or not to have a law. What we should be debating is what type of law we want. In that way we can at least come away with something to build on instead of having 4 or more years just washed away.
Blog
Ecodesign for Sustainable Products Regulation
This blog post is your guide to the Ecodesign for Sustainable Products Regulation (ESPR), a new regulation shaping how companies design and sell products in the European Union. The article explains what it means, how it affects your business, and simple steps you can take to comply. Ready to navigate the future of sustainable products? Let’s dive in!
READ ARTICLE
Podcast
Inside EU elections 2024
Who said that politics has to be a dreary affair? Beyond the ballot is our brand-new podcast that will provide you with the essentials to effectively prepare your organisation for the upcoming EU elections in June 2024. How? In only 15-minutes of insightful talks with notable guests active in the notorious EU bubble.
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Eliza Druta
Hi, my name is Eliza and I am curating this newsletter to bring Brussels’ main sustainability insights to your inbox, every month. Do not hesitate to reach out should you need more information on the newsletter’s content or if you have suggestions for our next editions.
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