Edition 2 | Cracking the code: How attractive is Europe?

Edition 2 | Cracking the code: How attractive is Europe?

Welcome to the second edition of our EY Public Policy Pulse — a quarterly newsletter curated by the EMEIA Public Policy team — where we share EY views, thought leadership and insights on material European policy themes for EY and its clients; all the way from sustainability to digital, corporate governance, reporting and tax.

Through it, we aim to spark meaningful conversations and an exchange of ideas. We invite you to join in as we strive to contribute positively to solid public policy. Please do get in touch with us to share your thoughts and perspectives.?

Sign up now to join more than 1700 subscribers, share it and let’s see if we can reach 2??K!

?? In this edition, we will cover:

  1. How can Europe open up the tap for foreign investment to finance its digital and green transformations?
  2. Effective corporate governance for long-term, value-led sustainability
  3. Europe leads the world in quantum tech exploration
  4. Business operations and semiconductor industry growth at risk amidst social unrest and export restrictions

Spotlight ??

How can Europe open up the tap for foreign investment to finance its digital and green transformations?

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Recent geopolitical and macroeconomic uncertainty has been damaging for investment in Europe, but the outlook for the future is significantly more optimistic, reveals the 22nd EY Europe Attractiveness Survey.

EY has been running this study for over 20 years now, providing invaluable insights into foreign investment and Europe’s future. Our comprehensive evaluation of FDI in Europe draws from two reputable sources: The EY European Investment Monitor and an online survey of 508 international decision-makers.

The survey also made headlines across Europe, including Julie Teigland ’s interview with Sky News. Notably, President Emmanuel Macron highlighted the survey's findings in his Op-ed published in the Financial Times.

There is a lot to unpack this year but here are the main headlines for you ??

  • ?? 2023 is a critical year for Europe’s economy. 67% of the businesses surveyed have plans to establish or expand operations in Europe over the next year.
  • ?? The three largest economies lead in the strategic sectors. France, the UK and Germany continue to attract the bulk of FDI flows, accounting for 50% of total projects, with “La France” being the most attractive country in Europe for foreign investment for a fourth year running.
  • ?? The digital and technology sectors lead Europe's inbound investment. With our economies going digital, Industry 4.0 in full swing, and the European Recovery Fund prioritizing digital and green projects, software and IT services took the lead in FDI projects for 2022, growing by 8% and claiming a 20% share.

So, what policies will we need to drive the inward investment that will be critical for Europe’s digital and green transformations? We’ll be discussing that at our Annual Summer Reception on June 26 which we will host at our EU Public Policy Hub in Brussels. You will hear from EY leaders, EU industry experts and also John Berrigan , Director-General for Financial Stability, Financial Services and Capital Markets Union of the European Commission .

Sign up here if you would like to join us.

For more information, please contact Ambrose Murray and Marc Lhermitte .


Effective corporate governance for long-term, value-led sustainability

In the race against time to address the world's sustainability challenges, countries worldwide are striving to find effective solutions. Among them, the EU is at the forefront of this movement, demonstrating its commitment through the proposed Corporate Sustainability Due Diligence Directive (#CS3D). It aims to foster sustainable and responsible corporate behavior throughout global value chains.

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As #CS3D reaches the final stage of negotiations between the Council of the European Union and the European Parliament , EY published the third annual edition of its Europe Long-Term Value and Corporate Governance Survey in March. Drawing upon the views of 200 senior leaders, our research finds that effective governance and board oversight is a critical factor in driving sustainability from targets to concrete outcomes. The analysis also reveals that a small group of high-performing sustainability governance “experts” are driving both financial value and progress, compared with a long tail of “beginners.”

Sustainability governance experts ???

?? 76% have more confidence in their financial performance.

?? 90% plan to increase investment into their company’s ESG strategy.

?? 52% are more likely to achieve sustainability targets.

For more information, please contact Andrew Hobbs and Elsa Venturini

Executive remuneration for sustainability

Designing effective variable remuneration schemes is one of the above survey’s three main recommendations to drive even faster progress against sustainability objectives. EY and ecoDa a.s.b.l - The European Confederation of Directors Associations recently partnered to go deeper on this topic by jointly hosting a webcast to discuss practical considerations on how to link executive pay to sustainability goals. Feel free to check out some of the key takeaways and a full recording of the event.

For more information, please contact Martha Cook and Katherine Savage .


Europe leads the world in quantum tech exploration?

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?? Generative AI: a game changer for business and society, or a cause for concern? SIGN UP NOW for the next episode on June 28 (3:00 p.m. CET).

In March, Anne McCormick and Ivan Mannino from the EY EU Public Policy Hub presented the second webcast in our series – Decoding the Digital Future, bringing together EY public policy leaders and technology experts to help decode how today’s disruptive technologies are shaping the digital future for innovators, citizens and consumers, and policymakers alike.

In this second episode, Harvey Lewis (EY Emerging Technology Thought Leader) and Mira Pijselman (EY Quantum Lab Lead Ethicist) shared their insights on the potential applications, time horizons and ethical challenges posed by quantum technologies, as well as the critical and varied skills needed to drive the quantum revolution forward.

???? Did you know that Europe is leading the world in exploring quantum technologies? Our latest EY research found that Europe as a whole holds 45% of the total global share across over 200 experiments and pilots conducted worldwide over the last seven years!

You can read some more key takeaways and watch the full recording.

For more information, please contact Anne McCormick and Ivan Mannino .


Do not miss ??

Business operations and semiconductor industry growth at risk amidst social unrest and export restrictions

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Transnational crises are igniting a broad spectrum of political and social unrest, with potential adverse effects on business operations. In the advanced semiconductor sector, government actions to expedite decoupling will place strain on companies across various industries that rely on chips or related strategic technologies.

You can read more about these topics and much more in the latest analysis of the EY Geostrategic Business Group (GBG). Each month, the GBG provides expert insights on the hottest geopolitical developments and what they mean for global business across sectors and geographies.

You can sign up here to receive the next analysis directly in your inbox.

For more information, please contact Famke Krumbmüller and Alessandro Faini .


We would love to hear your thoughts on any of the topics above, so please feel free to share this newsletter and leave your comments below ??

The views reflected in this article do not necessarily reflect the views of the global EY organization or its member firms.

This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, legal or other professional advice. Please refer to your advisors for specific advice.?

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