Amidst a global awakening to environmental imperatives, the European Union has launched a major initiative: the European Green Deal. Recognizing the pressing challenges of climate change, biodiversity loss, and resource depletion, the Green Deal stands as a resolute commitment to reshape the trajectory of the European economy.
Since the Paris Agreement, the European Union has been committed to achieving carbon neutrality by 2050 to reduce climate change. The European Green Deal represents a series of measures to guide the European Union towards an ecological transition. Launched in December 2019 by the European Commission, the Pact aims to outline a roadmap (set by the IPCC) to avoid exceeding the 2°C warming limit (compared to the pre-industrial era). Thus, two main axes have been identified:
The European Green Deal’s transformative impact extends beyond environmental protection, offering considerable potential for economic growth, job creation, and technological advancement. The integration of key policies like the Farm to Fork Strategy and the New Action Plan for the Circular Economy underscores the deal’s commitment to creating a more sustainable Europe.
Europe is firmly committed to a circular economy to adopt a sustainable model. Its main objectives by 2030 are to:
The European Green Deal will introduce stricter social and environmental sustainability requirements for primary and industrial production. SMEs from third countries will need to provide more detailed information on products they export to Europe. Production and export costs may increase in the short term, but it will also enhance competitiveness in a sustainable global market in the long term.
Companies will also be encouraged, or even required, to adopt cleaner sources of energy. This could involve switching to renewable energy, improving operational energy efficiency, and investing in more environmentally friendly technologies.
The CSRD Directive will be a turning point for corporate transparency. Implemented on January 5th, 2023, it aims to :
Consequently, a broader set of companies will now have to comply with mandatory European sustainability reporting standards and provide detailed information regarding their risks, opportunities, and material impacts associated with social, environmental, and governance considerations. They will be responsible for measuring their impact and auditing their first-tier partners in France and abroad.
According to their measured impacts, they may access financing at preferential rates. Thus, financial institutions will no longer fund companies or projects generating excessively negative impacts. Companies already subject to the NFRD will be the first ones to publish their reports (2025) according to these new rules.
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