The European Union wants Europe to become the first climate-neutral continent by 2050. In a package of interconnected sustainability proposals which will result in new rules, new targets, new laws and new institutions, the EU is set to fundamentally change the lives of its citizens and businesses. This ‘Green Deal’ is their most ambitious policy programme since the monetary union and the creation of the Euro.
As bold ambitions have been turned into detailed policies over the past few months there have naturally been disagreements among the member states, most often about the speed of change and scale of new targets, but the consensus around the direction of travel has been remarkably strong.
When COVID happened and the economy was hit, the EU answered that the Green Deal was a plan for economic recovery, not a luxury that could be sidelined in the face of a crisis. And when Russia invaded Ukraine, and Europe’s energy supplies came under intense pressure, the EU doubled down again, explaining that this is an agenda built around increasing autonomy (and security) and reducing dependence on imported fuels and raw materials.
In this light, the EU’s focus on sustainability should be seen as not only an instrument to strengthen the influence of the EU internally and internationally, but also as the foundation of its long-term economic and industrial policy. EU Commission President Ursula von der Leyen has even called this, “Europe’s ‘man on the moon’ moment”.
Switzerland may sit outside the EU, but Swiss companies cannot escape these developments. Any Swiss company trading in any EU member state will have to comply with at least some of the new rules and standards or face significant taxes if they don’t.
A look at the current projects in the area of sustainability shows where the journey is heading:
- EU Green Deal & Fit for 55: a total of 14 new proposals focused on CO2 reduction in all sectors or policy areas
- Circular economy: new requirements to reduce pressure on natural resources, especially in the construction and textile industries
- Corporate reporting: new standards and requirements for transparent sustainability reporting
- Due diligence in supply chains: requirements for companies to demonstrate compliance with sustainability standards across their supply chains
- The EU Taxonomy: a classification of economic activities into “sustainable” and “non-sustainable”
- Sustainable financial products: requirements on asset managers, banks, and insurance companies to meet sustainability standards in their products, their activities and their clients