Sustainability and competitiveness are Europe’s dual imperative for a prosperous future

The current European elections have shifted the political dynamics of Europe. There are actually a rising variety of political events questioning the necessity for extra sustainability measures on the European degree.

For these of us dedicated to seeing the EU lead in defending individuals and the planet, this political repositioning raises severe issues about how the EU will meet its vital emissions discount targets, obtain local weather neutrality by 2050, and sort out ongoing financial and social challenges.

Stakes are significantly excessive if the ambition for sustainable finance wanes, jeopardizing progress made to this point.

Throughout the earlier legislative time period, EU legislators took decisive steps to embed sustainability into its regulatory framework. The adoption of the European Local weather Regulation in 2021 was pivotal, legally binding the objective of attaining net-zero greenhouse fuel emissions by 2050 and setting bold emissions targets for 2030.

This positioned the inexperienced transition on the forefront of the EU’s agenda. And the proof of its success might be seen within the 24% discount in emissions from 1990 ranges.

Concurrently, new laws such because the Company Sustainability Reporting Directive, the Sustainable Finance Disclosure Regulation and the Company Sustainability Due Diligence Directive, and up to date provisions inside Solvency II and the Capital Necessities Directive and Regulation recognised and strengthened the function performed by the monetary sector in facilitating the inexperienced transition and defending monetary stability.

These measures aren’t simply useful for the setting and our society — they’re important for enhancing the resilience and efficiency of corporations, fostering transparency, satisfactory threat evaluation, and long-term considering.

Extra energy to these reverting progress

The brand new political panorama provides extra energy to those that need to flip the clock again on the progress made in favour of extra business-friendly guidelines, ostensibly to spice up European competitiveness globally.

This can be a false contradiction: sustainability and financial competitiveness will not be mutually unique.

Sustainability is important if European companies are to stay resilient, affluent and internationally aggressive. On the identical time, sustaining a dedication to sustainability will protect the progress already achieved and make sure the EU meets its local weather targets on time.

The stakes are too excessive to pause or backtrack. Europe faces escalating threats from local weather change: hovering temperatures, vanishing ecosystems, and rising sea ranges. These environmental crises exacerbate socio-economic challenges like exploitative working circumstances, poverty, and inequality.

The monetary sector, usually pushed by its profitability, often ignores the long-term sustainability wanted to handle these intertwined points.

The upcoming legislative time period is a vital interval for the EU to cement its management within the transition to a sustainable economic system whereas enhancing its resilience and competitiveness.

Amongst different initiatives, this calls for setting excessive requirements for the monetary sector, guaranteeing regulatory coherence in terms of sustainability necessities, and taking a agency stance towards dangerous practices.

Misleading practices want to finish

At the beginning, the EU ought to allow the monetary sector to help a simply, inclusive and zero-carbon financial mannequin.

By clearly defining which actions drive optimistic change and which dangerous actions have to cease, traders can direct funds in the direction of initiatives that higher shield each individuals and the planet, equivalent to renewable power, sustainable infrastructure, and social inclusion applications.

On the identical time, combating greenwashing and social washing is vital to enabling traders and customers to make better-informed selections. These misleading practices misrepresent funding merchandise as extra sustainable than they’re, eroding belief and delaying obligatory actions.

EU policymakers should fight this with strict standards defining sustainable investments, efficient supervision, and extreme penalties for violations.

As well as, offering extra and higher details about sustainable funding choices will empower customers to keep away from deception and drive a broader shift in the direction of accountable funding practices.

Lastly, to make sure monetary stability and discourage help for dangerous initiatives, it’s essential to scale back their profitability, making them much less engaging. Banks and insurance coverage corporations ought to allocate extra funds to cowl dangers from investments harming the setting and society.

Not only a ethical crucial

The ball is now within the European policymakers’ court docket. Final week, EU leaders made essential selections concerning the management and strategic route of the EU for the following 5 years.

Regardless of acknowledging the catastrophic penalties of local weather change and reiterating the dedication to local weather neutrality, the brand new Strategic Agenda falls wanting making the inexperienced transition a standalone precedence, focusing as a substitute on competitiveness and defence.

As new MEPs put together to embark on this new time period, and with the brand new European Fee and Parliament presidents awaiting formal nomination in July on the Parliament’s first plenary session, it is key to emphasize the crucial for extra particular initiatives and a steadfast dedication to sustainability, which isn’t only a ethical crucial but additionally an financial necessity.

Europe can’t afford to falter in its pursuit of a safer, extra sustainable future for all.

Maria van der Heide is Head of EU coverage at ShareAction.

At Euronews, we imagine all views matter. Contact us at view@euronews.com to ship pitches or submissions and be a part of the dialog.