An industry-led European Green Deal

By Oliver Kaye, Director at LP Brussels

Every new European Commission mandate brings new initiatives and renewed impetus, as well as new challenges and opportunities for all stakeholders. Only 10 days after it took office, the Von der Leyen Commission published the European Green Deal, the most ambitious EU initiative meant to combat climate change. European Commission President Ursula von der Leyen called it ‘Europe’s Man on the Moon moment’ and Frans Timmermans labelled as the EU’s new economic growth strategy. At its heart, the ambitious package of measures puts a large amount of EU legislation up for review to match the renewed climate ambition underpinning it. The European Green Deal isn’t, however, simply about retooling existing legislation, it also introduces new elements such as a European Climate Law enshrining a climate neutral 2050 objective into law and a highly anticipated new industrial strategy. In effect, due to this significant increase in ambition, the EU will need to rely heavily on industry leadership, which has already allowed the EU to be on track to surpass its existing climate targets. With such an important role in achieving the goals of the European Green Deal, what can industry do to ensure they lead on these matters?

Businesses must put in place their own climate plans. While industry is often considered the climate laggard that new and updated legislation will set on the right path, this is far from the reality of the situation as many businesses and industry groups already have ambitious climate mitigation plans of their own which, in some cases, even supersede the level of ambition laid down in the European Green Deal. That is why it is crucial for industry to play its part in the process at EU level and outline the spectrum of possibilities at their disposal to achieve EU’s climate goals. One of the best ways for industry to speak up on ambitious yet realistic climate objectives is to present their own plan for their business or sector. Your competitors will – so should you. Frans Timmermans recently told a gathering of private and public interests in Brussels that the new European Commission will be looking for success stories in the fight against climate change – a great opportunity for business to showcase their ambition for the next decade by drawing up a climate plan reflecting what is possible in the quest to stop climate change.

Businesses must be willing to speak up and dictate ambition on a regular basis. There must be no mistake about this, the European Green Deal aims to be the most ambitious legislative package ever launched by the European Union in the fight against climate change. Its success will bring a reframing of our European economy across all levels. Every sector of the European economy will be under the spotlight, from maritime to machinery, and no industries will be able to afford to remain passive about what they can do to mitigate their climate footprint. Industry should therefore not be shy about coming forward with their own climate pledges, be they short, medium or long-term aspirations. It is crucial to get this right from the outset and those businesses who come forward with ambitious goals from the beginning will, without a doubt, set the tone. Those will be the ones who will show what is possible and will have the greatest impact on the form and content of any policy and legislative initiatives put forward by the EU in the coming few years. Those who will not lead will, in time, lag further and further behind – they will be rules takers and have no place at the table during the making of those rules. Therefore, for those leading, understanding where, with whom and when to engage should no longer be questions they ask when faced with a direct legislative threat to their business, but part of their day to day.

Businesses must take their key stakeholders along with them. The European Green Deal is a huge legislative initiative that should enable European citizens and businesses to benefit from the sustainable green transition. In order to be able to play a key role in setting and delivering on these ambitious goals, business leadership need to ensure they start on this journey together with their key stakeholders – first and foremost their employees, but also their customers, suppliers and community. The goal is for the European Green Deal to set a path for a transition that is just and socially fair. Therefore, all these stakeholders must be part of the process through which any business sets its climate strategy. This is the only way to ensure that a company’s climate plan is credible and deliverable – if your employees, suppliers, customers and community don’t think you will be able to lead the efforts against climate change, you won’t. No matter how ambitious the company leadership is.

The sustainable green transition is not possible without business. Europe has no chance to become climate neutral by 2050 without industry support. The EU economy will come to a halt under the pressure of unachievable goals if business doesn’t take a leading role in developing and delivering the EU Green Deal.