The world will not be destroyed by those who do evil, but by those who watch them without doing anything.
Albert Einstein
The elections for a new European parliament (6 – 9 June) are seen by many as the most important European elections ever. A new European commission faces a host of challenges. Outside Europe, the war in Ukraine, the conflict between Israel and Hamas and Donald Trump, who may become US president again, are difficult dossiers. Within Europe, climate and migration are particularly hot topics. Climate legislation, which cannot move fast enough for some parties, is particularly under fire from (radical) right-wing parties. Judging from the polls, the (radical) right is going to win a big victory in the upcoming elections. These parties say they are going to roll back climate legislation. Can this be done just like that? And if so, what are the consequences?
Therefore: 6 questions on the European elections and what does it mean for European climate legislation?
- Also, what were the priorities in 2019?
The European Commission, led by Ursula von der Leyen, launched an ambitious agenda: Europe should be climate neutral by 2050, the next 10 years should be Europe’s digital decade and a focused geopolitical approach should give Europe more influence in the world. These goals were developed into six priorities:
- European Green Deal (Europe will become the first climate-neutral continent by switching to a modern resource-efficient economy).
- A Europe ready for the digital age (people have new technologies that empower them).
- An economy that works for people (attractive investment climate, growth of high-quality jobs especially for young people and small businesses).
- A stronger Europe in the world (EU stands up for multilateralism).
- Promoting our European way of life (protecting rule of law and standing up for justice and core EU values).
- New impetus for European democracy (more participation, protecting democracy from foreign interference).
But after this promising beginning, Europe faced challenges that completely turned this agenda on its head. First of all, the Covid 19 outbreak, with major social and economic consequences. Although the economic impact during the pandemic was very high, the Netherlands recovered miraculously fast: by 2021, economic growth was 5%, unemployment was historically low at 4.2% and inflation was only 2.7%. Despite expectations that Covid would be a ‘game changer’, European citizens turned out to quickly go back to the ‘old normal’. People worked, consumed, and travelled as if there were 2 lost years to make up for.
Until Russia invaded Ukraine, when Europe suddenly turned out to be very vulnerable.
Not only because energy prices went through the roof (resulting in high inflation), the restriction of gas and oil supplies also had major consequences for (greenhouse) horticulture, fertiliser and steel companies and smaller businesses like bakers, among others. But not only energy supply was a problem, the flow of refugees from Ukraine also put great pressure on Dutch society (think of the housing shortage). Inflation was also running high, causing consumer confidence to fall, resulting in a drop in spending. Europe was forced to change course.
2. And what are the priorities now?
The Russian incursion has led to significant changes in priorities. The Green Deal is not off the table, but the focus has shifted to energy supply and (clean) technology. Strategic autonomy, especially on (fossil) resources has gained priority. Covid and the Russian invasion have also led to a higher priority of domestic industry – re-industrialisation. Security and defence, not mentioned in the 2019 programme, are now high on the priority list. Finally, and perhaps the most important issue for European citizens: migration. Crises in other parts of the world trigger waves of migration that European countries individually can no longer cope with. This migration issue in particular could well result in a major shift in the European Parliament.
3. What will the European parliament look like after June 2024?
The general expectation is that many countries in Europe will make a move to the right in their next elections. In Italy, Hungary and the Netherlands, radical right-wing parties govern (or will govern) the country. In Finland, Sweden, Slovakia, the radical right co-rules. In 15 other countries in Europe, radical right parties get more than 20% of the vote. Although the differences between the various radical right (or populist) parties are wide, there is one theme that unites them: stricter migration policies. This means that a new European Commission will give immigration a much higher priority, probably at the expense of climate.
4. Have there been any changes to European sustainability legislation?
Yes, unfortunately it does. Three key laws have been considerably weakened in terms of implementation.
The European Commission itself has sent out the first signals that things could all be toned down as far as climate legislation is concerned. The Corporate Sustainability Reporting Directive (CSRD), the law that requires companies to produce an annual sustainability report, has been watered down in a number of important respects. For instance, the sector-specific European standards are delayed by two years and the balance sheet and turnover thresholds for SMEs have been raised by 25% (making companies less likely to be required to provide sustainability reports). Foreign companies will have to deliver CSRD reports by 2029, 1 year later than in the original proposal.
The vote on a second key sustainability law, the Corporate Sustainability Due Diligence Directive (CSDDD) had been postponed by the European Council. Despite a previously reached agreement between European Council and European Parliament, several countries (including Germany and Italy) managed to force a postponement. The aim of the law was to require companies to “identify, assess, prevent, reduce, address and remedy human and environmental impacts – ranging from child labour and slavery to pollution and emissions, deforestation and ecosystem damage – in their supply chain and some downstream activities such as distribution and recycling”.[1] The law has since been passed, but again in watered-down form. The law now applies to companies from 1,000 employees and €450 million turnover (it was 500 employees and €150 million turnover). Climate transition plans, risk management, targets to limit global warming to 1.5°C – it is all being postponed (again). Among industry associations, which have put their lobbyists to work to stop the law, the champagne will be uncorked.
Finally, the Nature Restoration Act was passed with a minuscule majority at the last minute. The aim of the Nature Restoration Act was for member states to work on nature restoration in 30% of nature areas in poor condition by 2030. By 2050, the percentage should be 90%. The 2030 percentage has been lowered to 20%, but the biggest adjustment is that EU countries are not obliged to prevent deterioration of nature, but only to make efforts. A major victory for farmers’ organisations, which are vehemently opposed to this law.
5. What does this mean for sustainability legislation?
Fortunately, not all sustainability legislation is under fire. Much Green Deal legislation has been adopted by the European Council and Parliament, such as the Corporate Sustainability Reporting Directive (CSRD). However, its elaboration in the European Sustainability Reporting Standards (ESRS) can still be vetoed by the European Council and Parliament[2] . This could obviously also have implications for the implementation of the CSRD in Dutch legislation, especially now that the Netherlands seems to be heading for a cabinet with PVV, VVD, NSC and BBB. None of these parties prioritise sustainability and sustainability legislation (and that is an understatement). Legislation that has thus already been passed cannot be reversed, but precise interpretation and implementation of the laws could be seriously delayed.
6. How to proceed?
That something needs to be done, everyone agrees by now. When it comes to the climate, great strides have been made in recent years; the Netherlands is the world champion of solar panels, the number of heat pumps is increasing by 35% annually, the number of electric cars has tripled in 2.5 years[3] . Quite honestly, in terms of nature restoration and biodiversity, we still have quite a few steps to go, but why shouldn’t we succeed? ‘Flinching is not an option’[4] , Diederik Samsom recently said in an interview in the Volkskrant.
A new European Commission is no longer expected to take the lead in making the economy more sustainable. But this need not stop us! As consumers, we decide which products we buy. What stops us from buying products from companies that are transparent about their sustainability ambitions and account for them annually? And companies, why wait for legislation requiring you to provide sustainability reports? Take your responsibility as an entrepreneur and start your own sustainability transition and report on it transparently!
Finally, back to Albert Einstein’s quote:
The world will not be destroyed by those who do evil, but by those who watch them without doing anything.
So don’t be a spectator, but take responsibility and just start! As a consumer with more sustainable consumption and as an entrepreneur with more sustainable production.
For consumers (and we all are), the government has an excellent website to help you make sustainable(er) choices:
https://www.rijksoverheid.nl/onderwerpen/duurzame-economie/vraag-en-antwoord/hoe-kan-ik-duurzaam-consumeren
And for entrepreneurs, ask yourself how you want to be remembered? As a company that put off sustainable choices for as long as possible, failed to take responsibility for its part in climate change, failed to combat poor working conditions at suppliers? Or do people speak of you with respect, that you were at the forefront of sustainable production, were transparent about your sustainability ambitions and could demonstrate that you realised them. Just start preparing sustainability reports. These will force you to think about the impact your company has on people and the environment, and how you can reduce that negative impact and increase positive impact. Check out ESG reports more information.
[1] CSDD draft February 2022
[2] Position Green webinar ‘A paradigm shift in the making’ 21-2-2024
[3] Bovag, 22-9-2022
[4] Interview Volkskrant, 9-3-2024