Latest news with #CS3D
Irish Examiner
7 days ago
- Business
- Irish Examiner
How renewables can help the earth live long and prosper
'What's the problem, Scottie?' 'It's the engines, Cap'n. They cannae take it anymore. She's gonna blow!' 'Then have to risk a full power restart. How long do you need?' 'At least fourteen hours, Cap'n. I cannae change the laws of physics!' 'You've got eight minutes.' In fairness to Captain Kirk, despite facing a seemingly unsurmountable crisis in almost every episode of the original Star Trek, he never actually lost the USS Starship Enterprise, and so continued to explore strange new worlds, to seek out new life and new civilizations, and to boldly go where no man has gone before. The Starship European Union could learn a lot from him, particularly in relation to delivering innovative solutions to complex problems in double quick time and on schedule. Admittedly, the EU missions tend to be far less glamourous than interplanetary exploration, but another important milestone date has just been pushed out and although it won't implode the whole spaceship, it is yet another small tear in the fabric of the EU sustainability strategy. The issue is with the prosaically titled 'Corporate Sustainability Due Diligence Directive' (CS3D), an instrument designed to improve and standardise the quality and content of reporting sustainability performance among companies doing business in Europe. Think of an accountancy balance sheet but instead of stating asset and money balances, it measures 'good behaviour by companies.' The CS3D directive is a key element of the overarching 'Green Deal' strategy with the long-term objective of adding transparency and accountability on an 'apples with apples' comparison basis to ensure that businesses of meaningful size provide clear and reliable information on their performance against environmental, social and governance (ESG) mandates. The other key obligation is that 'in-scope' companies adopt and put into effect a transition plan for climate change mitigation which aims to ensure, 'through best efforts, compatibility of the business model and strategy of the company with the transition to a sustainable economy and with the limiting of global warming to 1.5°C'. For businesses, it presents a trade-off between the cost and hassle of implementing additional regulatory overhead and the commercial opportunity that an increased focus on sustainability will drive additional goodwill to their brand in global marketplaces and better efficiency and innovation in their supply chains. Broadly speaking, the directive has two tangible demands on the companies impacted. Firstly, to drive focus across global 'value chains' for climate mitigation. Secondly, it formalises the principle that all businesses have a responsibility to respect human rights, which are 'universal, indivisible, interdependent and interrelated'. The intent, or — more accurately — hope, is that to meet these twin objectives, companies would begin to steer more capital investment towards sustainable processes and products and reduce impediments to better net-zero and human rights outcomes. Peter Burke, Minister for Enterprise, Tourism and Employment, has welcomed the deferral of the 'Corporate Sustainability Due Diligence Directive' (CS3D). Simply put, companies that are subject to the directive will be compelled to report and publish information on any material risks identified and what countermeasures taken to mitigate these risks and publish annually the impact, positive or negative that accrue from these changes. Even simpler put, lots more cost and time-pressure for companies for what is effectively an increased burden of 'non-finance' accounting. CS3D was issued early in 2023 and scheduled to be enacted into the national laws of the member states by July 2024. Given that the accounting standards that we know, and love today can be traced as far back as ancient Mesopotamia this has proved to be a very short timeline for such a fundamental re-engineering of corporate statements and opposition to the whole package is gathering, like belligerent Klingons, on the starboard bow of the directive. 'How long do you need, Scottie?" "Five thousand years, Cap'n." "You can have two.' Opposition to the proposal among businesses of all sizes has deepened and as result of intensive lobbying the European Parliament realising that resistance was futile, 'set their phasers to stun' and voted overwhelmingly to 'stop the clock', allowing all stakeholders time and space to catch their breaths and reset the implementation tempo and strategy. The original timeline for full implementation has been extended in by two years and the number of companies that will be subject to the directive has been reduced. The amendment to the directive reclassifies 'large' companies to those whose activities are more likely to impact human rights, and the environment will be impacted. The new threshold means that companies with more than 5,000 employees and net turnover exceeding US$1.6bn are now subject to the directive and are expected to begin reporting from 2028. These changes also mean that 80% of the companies originally targeted for inclusion in the programme are now off the hook. Additionally, the transposition of the directive into national law has also been extended by another year. Since the 2024 due date has passed, only Bulgaria, Czechia, Denmark, Ireland, France, Croatia, Italy, Lithuania, Hungary, Romania, Slovakia, and Sweden have met the target date for national legislation. Twelve down, still fifteen to go. While the recent amendments are not exactly a 'full power restart', they at least provide some much-needed wriggle room for Kirk to navigate the Enterprise away from those pesky Klingons. Other problems with the directive which may in the longer term be deeper than the noisy business issues were identified in an article published last December by Cambridge University Press, (The Unintended Consequences of the EU Corporate Sustainability Due Diligence Directive). In it, ESG lawyer Jowita Mieszkowska, argued that the CS3D directive could turn out to be a hat trick of own goals. Firstly, she points to the possibility that companies will withdraw from countries with problematic human rights because the risk of EU sanction leading to negative economic outcomes for regions that most need the investment. Second is the sheer regulatory overhead of implementation might divert capital from more productive and ethical uses. Thirdly, the directive might in fact weaken even stronger national legislation. For instance, Germany would actually have to dilute the impact of it's 'Supply Chain Act' to conform with the provisions of CS3D. Peter Burke, Minister for Enterprise, Tourism and Employment, welcomed the deferral, saying that he 'strongly supports the simplification and burden reduction agenda that is being led by President von der Leyen at European level, to maximise the competitiveness of businesses in the EU in the evolving global trading environment. These proposed changes will of course significantly help enterprise in Ireland, and most of all our SMEs.' The CS3D directive is a key element of the overarching 'Green Deal' strategy; businesses of meaningful size must provide clear and reliable information on their performance against environmental, social and governance (ESG) mandates. Mr Burke will now have to amend the Irish legislation to accommodate the changes enforced by a missed schedule and the elephant in the room has been pushed into a dark corner where it will be neither seen nor heard. The intent of CS3D was after all to help stop the planet growing warmer by reducing sustainability-related risks and promote climate neutral economic transitions in accordance with the 2015 Paris Agreement. These noble aims have been sidelined amid all the political and administrative turmoil and First Officer Spock might reasonably ask: How will this help planet earth to live long and prosper?
Euronews
19-02-2025
- Business
- Euronews
‘Lack of spine': France under fire for considering ‘Trump-inspired' U-turn on environmental rules
Energy consultants are criticising the Macron government following reports that France may seek to kill EU legislation that makes companies reckon with their environmental impact. Companies in the Environmental Social and Governance (ESG) sector fear the Corporate Sustainability Reporting Directive (CSRD) could be washed away after Trump's return in the US. The CSRD requires companies in Europe to produce reports on their environmental and social impacts, including emissions, to ensure they comply with EU rules. Meanwhile the Corporate Sustainability Due Diligence Directive (CS3D) holds companies liable for human and environmental rights violations in their supply chains. Both directives were initially introduced in late 2023, but they have not yet been adopted in all countries, with Germany and several Eastern European countries fearful about their impact on their industries ability to compete. Currently, the EU is working on an ' Omnibus simplification package ' to simplify and streamline the directives for the benefit of affected businesses. But there are concerns it could junk the sustainability legislation entirely when Stephane Sejourne, executive vice-president of the EU and former French foreign minister, unveils the package on 26 February. Is France really looking to scrap the corporate sustainability rules? Sejourne, a close ally of Macron, caused companies in the ESG space - such as green tech firms, funds that invest according to ESG principles and environmental consultancies - to worry when he told French media to expect a 'complete deletion of [CSRD and CS3D] reporting' from the Omnibus package. A source close to Sejourne told Euronews that the 'confusion' stemmed from a translation error. When Sejourne used the French word 'suppression', it was translated as 'deletion' rather than 'modification' which the source claimed was what was intended by Sejourne's remarks. Meanwhile Politico reports that others in Macron's camp are less sure that France, which has already implemented the directives in Omnibus, intends to keep them. Macron himself called for a break on regulation arguing that Europe must 'regain [its] ability to compete.' And Politico revealed a document dated 20 January which suggests that France is pushing to delay the implementation of CSRD and CS3D. Alexis Normand, CEO of Greenly, a carbon accounting firm, told Euronews that some changes to CSRD and CS3D are needed. There are no industry-specific guidelines for which of the over 1,000 reporting points in the CSRD need to be taken into account by a given company. That means companies make that judgement themselves and then it is checked by auditors. Normand says companies can get 'a bit swindled by the auditors who would say everything is 'material' because they are paid by the hour and companies can end up paying a tonne'. Normand estimates that publishing industry-standard guidelines and removing the need for auditors in the process could save companies around 80 per cent of the cost and make it easier to implement CSRD. ...if you scrap the whole thing what you are really doing is scrapping climate ambition. And that is toxic. Alexis Normand CEO of Greenly 'Why is this approach [better] versus if you scrap the whole thing? Well if you scrap the whole thing what you are really doing is scrapping climate ambition. And that is toxic'. The Trumpist turn in Europe Stephane His, an independent energy consultant and director of Renewable Energy for All wrote in La Croix last month that 'Trumpism is already penetrating European environmental politics'. He tells Euronews that the push for Europe to abandon its ESG legislation was part of a 'wave' of 'regression' on climate policies that began before Trump. 'It affected the finance sector, the agriculture sector (calling organic into question), the automobile sector (calling the electric car into question) and now renewable energies,' he says. 'It is because there has been progress in the ecological transition that has threatened established interests that the resistance has grown stronger. This is all the more reason not to turn back'. The US has been particularly resistant to CSRD and CS3D regulation which would make them comply with legislation in Europe that has no serious equivalent in America. Howard Lutnick, Trump's Commerce Secretary, singled out CS3D as a threat to American industry and the US economy in a speech earlier this month. 'US exports of natural gas are keeping the heat on in Europe this winter because the regulatory structure there has caused companies to flee,' Lutnick claimed. 'Yet the EU is attempting to harm the competitive advantages of US companies by forcing them to comply with CS3D.' In late January, the Guardian and Desmog revealed that the Heartland Institute, a climate change denial think tank with links to the Trump administration, has been coordinating a network of far-right MEPs to oppose the CSRD and CS3D legislation. Heartland has a record of extreme positions on environmental issues, comparing those who believe in global warming to the Unabomber in one infamous billboard. France's ESG U-turn For Normand, who is based in Paris, the worry is that the Macronists - who are domestically allying with the far right to prop up the Bayrou government - will push for an alliance between the centre right in the Renew grouping and the EPP and the far-right groups to kill the legislation. 'The thing that is very surprising is that it's France who pushed for CSRD the most and now France has basically aligned itself with the German position who are pushing back because they represent the car companies and the Mittelstand [medium-sized manufacturing companies in Germany]. ...what took everyone by surprise was the lack of spine of the French authorities on this. Alexis Normand CEO of Greenly 'So what took everyone by surprise was the lack of spine of the French authorities on this. So they were basically saying the opposite 6 months ago.' The source close to Sejourne insisted that any such fears were the result of a misunderstanding. However, they stressed that they could not comment on the contents of Omnibus legislation until it was published. An anonymous lobbyist told Politico that the Macron government had heard the arguments for delay or rejection of the legislation from industry and aligned itself with them, leaving the lobbyists 'positively surprised'. While lobbyists are pleased, civil society organisations, trade unions and members of Macron's own coalition are up in arms at the government's moves. The European Coalition for Corporate Justice has coordinated a letter from 160 NGOs and trade unions criticising the potential rollback of the legislation. Meanwhile Clement Beaune, Macron's Europe minister during the French EU presidency, slammed the signalling towards rollback of CSRD as 'light Trumpism'.
