#9 Climate News: New Area of Climate Transformation

On February 6th, the EU Commission published its proposal for the 2040 climate target: 90% emissions reduction compared to 1990. For many, this does not go far enough, given the rapidly advancing climate damage, others consider the goals too ambitious.

The fact remains: We are in the central decade of transformation - towards a low-emission economy, new business models, technical aids and regenerative processes. Every industry, every company and every business decision is influenced. Now it’s time to make smart choices!

The first Climate News of Q1 2024 bring many updates, dive deeper here and get your regular monthly update right in your inbox, sign up here .

Climate Transformation Drivers

Climate Targets

The proposal published yesterday, provides a 2040 climate target that strengthens the EU's commitment to combating climate change and aligns with the European Green Deal.

?? The EU's 2030 climate target is to reduce net GHG emissions by at least 55% relative to 1990. The 2040 climate target is our next intermediate step on the path to climate neutrality.

?? Industries and businesses will play a vital role, leveraging decarbonization measures across their value chains to reduce emissions significantly.

?? Achieving the 90% reduction will also require implementing existing targets, regulations and laws into actions, using data and technologies to assess progress over time and increase transparency, accountability and shared efforts.

Climate Disclosure & Regulation

CSDDD

In order to put existing goals from the Paris Agreement and the European reduction Path into practice, not only reporting requirements are needed, but above all guidelines to reduce emissions where they arise. Typically with up to 90% in the supply chain!

?? The Corporate Sustainability Due Diligence Directive (CSDDD) aims for such a pan-European supply chain framework. December 2023, negotiators from the European Parliament and the EU agreed on a compromise for the directive, also known as the “EU Supply Chain Act”. Germany also agreed.

?? Now the Committee of Permanent is gearing up for a final discussion on February 9th. While this official vote by the European Parliament is generally considered a formality, it can now cancel the implementation of CSDDD.

?? The directive applies to EU-companies with 500+ employees and an annual turnover EUR 150+ million.?They will be legally obligated to:

• Establish a transition plan, ensuring that their business models align with limiting global warming to 1.5°C.?
• Enforce responsible by mandating diligence in environmental and human rights aspects, fostering sustainability business practices.
• Impact on Businesses with global supply chains, CSDDD may increase reporting efforts but aims for on-the-ground benefits, reducing emissions, and streamlining efforts.

Join our free CHOICE Event, 15th Feb, for a deep dive into CSDDD.

CBAM

The EU Carbon Border Adjustment Mechanism (CBAM) ensures that goods imported into Europe align with its commitment to carbon pricing. It was introduced in two phases: In October 2023, a reporting phase came officially into application, the full implementation is scheduled for 2026.

It's 5 Key Objectives are:

1?? ?????????????? ???????????? ?????????????? & ?????????????????????????????? ????????????????????: aims to prevent carbon leakage, which occurs when companies relocate production to countries with less ambitious climate policies to avoid carbon costs.

2?? ???????????????? ????????????????: initially it applies to a limited number of high-emission products, including cement, fertilizers, steel and ferrous metals, aluminum, hydrogen, and electricity.

3?? ???????????? ???? ?????? ???????????? ???????????? ??????????: Businesses will have to undertake detailed carbon accounting throughout their entire supply chain. Companies not initially included in the CBAM scope may also experience the impact of carbon costs being passed down the production chain.

4?? ?????????????????????? ???????????? ????????????????: CBAM not only sets new standards within the EU but also encourages Europe's trading partners to implement similar measures.

5?? ?????????????????? ???????????? ?????????? & ?????????????? ??????????: CBAM contributes to the ongoing debate about finding a compromise between global trade governance and climate policies. It exemplifies the EU's commitment to aligning economic interests with environmental objectives. It will be essential for businesses to adapt, and improve the transparency of their supply chain’s climate impact.

Join our free CHOICE Event, 7th March, to dive deep into CBAM.

From Climate Targets to Actions

Most companies are at the beginning of their journey. I feel it is very much needed to accept and share this fact. Goals and guidelines can be far out of reach and the beginning still seems to be the hardest part.

What helps to get into Action?

1. We work in our Scope 3 Action Group closely with sustainability and procurement leaders that aim to translate climate targets into a tangible decarbonization pathway - across the supply chain. Best part of it: Learn with and from others.
2. Benchmark your strategy, work and actions and keep up with regulation. Get ahead of the game by setting robust, science-based targets and engaging your supply chain. Get inspired by the Journey of our Climate Community.
3. Tackle the biggest Challenge: Scope 3 Decarbonization and move from Data to Action . Most decision makers lack data from their suppliers, or are not at all satisfied with the quality of data they get back in excel files and endless emails. Step up the spreadsheet game and transition towards a structured approach to drive transparency, actions and meaningful results in the supply chain using Climate Intelligence to manage supplier climate data .

Let's make it happen! Best time to start: Is always now.