Green Deal or No Green Deal?
What’s in this Week’s Newsletter:
In the first EU Parliament hearing since the US election, voices against the EU Green Deal from the right and far-right were louder than ever. Emboldened by President Trump’s rhetoric on climate change, MEPs lambasted Teresa Ribera - the new EU minister Minister for Ecological Transition and Demographic Challenge - claiming the Green Deal was equivalent to a “ Taliban ” policy and blaming it for the recent Spanish flood.?
Despite the rightward tilt resulting from June’s EU elections, the EU recently reconfirmed its commitment to the Green Deal. Now, this could change. Professor of EU law Alberto Alemanno said, “The shift towards a less climate and environmentally friendly policy agenda in the US will inevitably further tarnish the EU commitment towards those goals .”
The EU’s landmark sustainability reporting rule, the Corporate Sustainability Reporting Directive (CSRD), which kicks in in 2025, is under the spotlight. A growing chorus of voices is asking for a weakening and rollback of the CSRD. France’s President Michel Barnier claims that there is an “over-transposition” issue for EU rules, making EU farmers and businesses less competitive. Adding that “This is particularly true for European texts such as the CSRD directive, the scope of which should be re-examined .”
Despite warnings of penalties , 17 member states still have not transposed the CSRD into national law. Critics of the CSRD see this lag in adoption as an opportunity to simplify the reporting regulation and reduce the burden on smaller companies by removing SMEs or non-EU companies from its scope. Another simplification proposal is to further delay the application of the full set of ESG standards, with climate reporting first and other sustainability metrics to follow.
In addition to the potential weakening of CSRD, the EU’s Deforestation Rule (EUDR), which was meant to kick in on December 30th this year until it was postponed for a year, was weakened in a vote on Thursday. EU lawmakers voted through 9 amendments, the main one being the exemption of 'no risk' of deforestation countries . Initially, 15 amendments were proposed, which would have substantially weakened the rule, postponing the EUDR for an additional two years . Former EU environment commissioner Virginijus Sinkevi?ius said this will make the EU “look ridiculous in front of the partners and international community, backtracking on one of the biggest achievements of the previous Commission .” We will know by mid-December if these amendments are in the final rule.?
While the EU’s President Ursula Von Der Leyden claims it is business as usual for the green deal, they are clearly under intense pressure to weaken aspects of it. However, most believe the EU’s green transition is too far along for much backtracking now , and for now, they have managed to resist calls for backtracking on rules like the ban on gas-powered cars by 2035 .?
Preparing For the Hand-Off
President-elect Trump’s nomination to lead the Environmental Protection Agency (EPA) has sent shock waves through the environmental community. Lee Zeldin, (former Republican congressman from New York) has called climate change a ‘scam’ and would likely seek to overturn many of the EPA’s climate rules.?
Trump’s hardline on climate policies and international agreements, like the Paris Accord, has received criticism from an unlikely source. Exxon CEO Darren Woods advised the new president against any extreme policy u-turns and to stay in the Paris Agreement, saying, “I don’t think the need to address global emissions is going to go away. Anything that happens in the short term would just make the longer term that much more challenging .”
To mitigate the likely backtracking, this week, the EPA announced a new policy, charging fees for methane leaks and flares above a certain threshold . This rule will be a challenge to roll back as it was enacted by a vote in Congress and will require another Congress vote to reverse.?
Likewise, legislators are trying to push through climate rules at the state level. In California, the Air and Resources Board (CARB) voted through tougher rules on low-carbon vehicle fuels . Governor Gavin Newsom was in Washington asking Biden to expedite some of his other climate plans . Other states are embracing climate leadership . New York Governor Kathy Hochul, who indicated she would revive her vehicle congestion plan , said,? “Governors filled the void of leadership during President-elect Trump’s first term, and Americans can be assured we’re prepared to fill it again .”?
Early Success at COP29
Trump’s election seems to have galvanized some countries at the ongoing UN Climate Meeting (COP29) . Even with what Bill Mckibben calls “An America-Sized Hole in The World ,” it was a very promising start to proceedings. Here is a snapshot of some of the early wins from COP29’s first week:
EFRAG Transition Plans
EFRAG also released a draft Implementation Guide for the Transition Plan for Climate Change Mitigation . The guidance gives companies guidelines for making ESRS-compliant climate transition plans. The guide also explains how the transition plans can be implemented in line with other EU regulations like the Corporate Sustainability Due Diligence Directive (CS3D) and provides clear guidance on disclosing decarbonization measures, investments, progress, and more . The draft plans will go out for public comment later this year and will likely be finalized sometime in 2025.
New Sustainability Assurance Standard
The International Auditing and Assurance Standards Board (IAASB) released the finalized version of their sustainability assurance standard, the International Standard on Sustainability Assurance 5000 (ISSA 5000) . The new standard will apply to both limited and reasonable assurance and will be critical for upcoming assurance requirements under the CSRD. It can also be used for ISSB-aligned reports. IAASB Chair Tom Seidenstein said that the ISSA 5000 was made with “particularly conscious of European timelines and requirements under CSRD .”?
ISSB Sees Adoption Progress
This week, the International Sustainability Standards Board (ISSB) released its first progress report since adopting the framework from the Task Force on Climate-Related Financial Disclosures (TCFD) in 2023 . The report found that 82% of surveyed companies used at least 1 of the 11 recommended disclosures from the TCFD framework, but only 3% used all 11 recommendations. The report also announced that more than 1,000 companies mentioned ISSB in their sustainability reports, and more than 30 jurisdictions are making progress toward aligning their national regulations with the ISSB standards.
The views expressed on this website/weblog are mine alone and do not necessarily reflect the views of my employer.?
Other Notable News:
Climate Litigation
Climate Regulations
Fossil Fuels
Sustainability Research
Notable Podcasts:?
Notable Jobs:
Turning data into CFO-ready ESG reports and carbon reductions.
5 天前EFRAG and CDP interoperability is a big win, and a move toward a more unified reporting standard, which is a good thing.
Professor Associado na Funda??o Dom Cabral
1 周Sociabilizado!