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How Sustainable Corporate Governance fits with other European Regulatory initiatives

The European Green Deal

On 11 December 2019, the Commission presented the European Green Deal, a growth strategy aiming to make Europe the first climate-neutral continent by 2050; it is supported by a 2030 climate target plan to reduce its emissions to 55% of its 1990 emissions level. The European Green Deal Investment plan, will mobilise at least €1 trillion of sustainable investments over the next decade.

On 14 July 2021, the European Commission adopted a set of proposals to make the EU’s climate, energy, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.

Two overarching initiatives of the EU support this agenda:
  • The sustainable corporate governance agenda
  • The sustainable finance agenda 

Together these initiatives seek to direct investments towards sustainable projects. By creating a clear taxonomy which establishes the actual list of environmentally sustainable activities along with the proposed revised reporting requirements of corporates, we can expect to see a transformation in that sustainability reporting is placed on a par with financial reporting, and capital is encouraged to flow to those activities which most contribute to the EU’s Green Deal.