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February 2, 2024

Editor’s note: Europe does the hokey cokey

German Chancellor Olaf Scholz
Germany’s finance and justice ministers have warned they will not be supporting the EU CSDDD, leaving Chancellor Olaf Scholz, pictured, in a fix as to whether his country is in or out of the directive (Photo: Sean Gallup/Getty Images)

The latest edition of our Sustainable Views newsletter

How’s everyone feeling this Friday? 

It has been quite a week in Brussels on the ESG front as policymakers do the “will-we-won’t-we” dance on various pieces of regulation. Hence, my analogy to the “hokey cokey”. 

In case this is purely a British thing, it is a kids’ dance. Everyone stands in a circle, sings and acts out the movements, which involve throwing various parts of your body in and out of the circle. One minute your arm is in and the next minute it is out. You get the picture. If anybody doesn’t know the song and wants some (very minor) cultural edification, here’s a link. YouTube assures me it is called the hokey pokey in the US, the boogie-woogie in Denmark and the boogie-boogie in the Philippines. 

Anyway, this week, we have seen various examples of EU policymakers effectively dancing the hokey cokey, deciding they want out of various environmental laws they were previously in with. 

The farmers protests have led to a bit of a watering down of nature protection demands from the European Commission, with more likely to follow, while France has decided to give in totally to the demands of the big farming unions and roll back on a plethora of green rules. Both the EU executive and the French government suggest the changes are a pause rather than a change of heart. Whether that is really the case remains to be seen. 

Meanwhile, the German finance and justice ministers have warned, just days before the European Council is due to vote on the provisional deal, that they can’t and won’t support the EU Corporate Sustainability Due Diligence Directive, leaving Chancellor Olaf Scholz in a fix as to whether Germany is in or out.

You can read more about these happenings and what’s taken place more broadly in the ESG world this week in our news round-up

All this is occurring as the commission gears up to announce a plethora of climate and energy transition proposals on February 6, including, according to leaked documents, a plan to cut greenhouse gas emissions by 90 per cent by 2040. 

It seems a phase-out of coal will be in, but no mention of a general phase-out of fossil fuels, as was pledged by world leaders at COP28 in Dubai at the end of last year. Expect close inspection from climate campaigners and the carbon capture and storage industry of the role planned for CCS in the accompanying “carbon management plan”, and of the commission’s expected “industrial alliance” for small modular nuclear reactors, aimed at accelerating their deployment in the early 2030s. We’ll cover all this in detail next week. 

The ability to decide whether they are in or out on green measures also seems to be a problem for the UK Labour opposition party, which hopes to take over running the country in the next election. Speculation about whether Labour will, if in power, enact plans to borrow £28bn a year for the green transition is rife once again.  

Given policymakers regularly insist they have the back of business, it would seem sensible to agree on some policies and stick to them, thereby ensuring the regulatory certainty companies and investors so crave. 

We have a special treat for you to end the week, bringing back Silvia in the Sustainable Views podcast. She’s in conversation with Alessandro Armillotta, founder and chief executive of the AWorld app, which aims to change users’ behaviour to improve their environmental and social impact. She spoke to Armillotta during the World Economic Forum’s annual meeting in Davos last month about his UN-backed project and the challenges of managing personal data and making sure his app is not used for corporate “greenwashing”.

Finally, a big thank you to those readers who have written to us this week in response to our newsletter. If you enjoy what we write, please encourage friends and colleagues to sign up for the newsletter and a trial of Sustainable Views — all for free. You can sign up here

Have a good weekend,

Philippa

Philippa Nuttall is the deputy editor of Sustainable Views 

 

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