The European Commission This Wednesday has presented a battery of measures to simplify and reduce accountability demands of companies in several key laws of the Green Pactwith the aim of reducing paperwork, with the aim of improving the Competitiveness of the European economy. “We cannot compete with one hand behind the back,” said the commissioner of Economics, Valdis Dombrovskis, At a press conference. “The last five years have been an intense regulation period and our commitment to the green and digital transition does not hesitate. But we have to admit that it has a cost,” he added. With the proposal of Brussels, only large companies will be forced to realize. According to the executive himself, 99% of companies in the EU are small and medium.
The reform of the legislation proposed in Brussels provides that 80% of companies will be exempt from providing information on the risks and opportunities derived from social and environmental issues, and on the impact of their activities on people and the environment. Brussels has pointed out that it will modify the legislation so that they can do so voluntarily.
The legislation entered into force this year and should be applied progressively. With the commission’s proposal, only companies with more than 1,000 employees or invoice more than 50 million euros a year will have to account. Brussels proposes to postpone the date of publication of these reports two years, to give margin to governments and Eurocamara can reach an agreement and modify the legislation
The commission has also proposed reduce demands within the framework of the Directive on Due Diligence in the field of business sustainability. Brussels wants to exempt companies from the obligation to “systematically” evaluations on possible negative impacts on supply chains. Regarding periodic sustainability evaluations, the obligation to do so annual to quinquenal passes. It also proposes to ask for less information.
Simplification of standards
The simplification of the rules proposed by Brussels also applies to rules that determine what activities can be considered sustainable, within the framework of an investment policy. Also here, the commission’s proposal is to limit the number of covered companies, the type of activity and the requirements.
The border carbon adjustment mechanism was one of the great measures of the green pact. Precisely with a view to promoting that the same measures to fight the climate change that the EU applied to other parts, and to protect the companies from unfair competition.
In practice, it imposes a rate on imports of goods that do not meet environmental standards similar to those of the EU. This Wednesday, Brussels has also proposed to limit its scope. The objective is to reduce paperwork and impact for small importers and individuals, exempting them from the norm.
The commission has explained that in this case, the measure responds to the evolution of the operation during the transition period since 2023. The objective, has said Brussels, is to save this requirement to 90% of the companies, while continuing to cover a 99% of CO2 emissions.
The calculation of the commission is that thanks to these measures and the reduction of paperwork, companies could save 63 billion euros in administrative costs. But in addition, he hopes that simplification also in access to financing through several instruments can mobilize 50 billion extra.
A slightly less green pact
The European Commissioner of Economics, Valdis Dombrovskis, defends the “simplification” plan of the commission. “The alternative,” said Dombrovskis, “it would be to give ground to our competitors that do not necessarily share our working values or methods.” For some, that is exactly what the union is doing.
“We are convinced that by keeping large companies under the framework of mandatory statements, we are covering the most significant part of impact on the environment and people,” said the Commissioner of Financial Services, Maria Luís Albuquerque.
The Portuguese has insisted that in which commission expects a good part of the companies to continue informing about their compliance with these standards “because their consumers want to know it, because investors want to know.” Albuquerque has recognized, however, that the Commission has not made an evaluation of the impact of these measures given the “urgency.”
The Global Witness Environmental Oenegé has accused the commission of “total abandonment of their responsibility for people and the planet” and “giving contaminator free pass.” In a statement, he has asked the Eurocamara and the governments that protect the laws in their original format.
Some of the measures involve modifying norms that had not yet entered into force. Others had to extend their coverage progressively. The question is whether these measures were not adequate, or were “disproportionate”, as community sources recognize, why they were approved. A community source has recognized that today’s world is not the world a year ago.
