Since concerns were first raised about a “green squeeze” to characterise what appeared to be a rather incongruent approach by the European Commission to save the planet “one tedious spreadsheet at a time”, the previous caricature of the commission (Trade Secrets, FT.com, November 27, 2023; and Trade Secrets, FT.com, March 7, 2024) has been transformed.
The new developments in Brussels, as reported by Simon Mundy (Moral Money, FT.com, February 28), have sought to slash green and social disclosure rules. This has led to the question: what has happened to the Green New Deal?
It is right that the commission has listened to the multiple concerns raised regarding an approach that failed to engage effectively with business, or fully to grasp company-level heterogeneity (given just how concentrated international trade is).
The delay to the implementation of the deforestation regulation from December 2024 to December 2025 has provided much-needed breathing space to invest in new systems; changes to reporting requirements for the carbon border adjustment mechanism now take better account of company-level organisation and delays to 2027 have been welcomed. Finally, new proposals to amend sustainability reporting look set to reduce the burden of reporting and focus on fewer larger companies — reducing the number reporting by an estimated 80 per cent.
However, while Mundy’s article suggests the hasty slashing of laws passed only recently “smacks of inconsistency”, and points to tensions between economic growth and sustainability, others would suggest there is an even more challenging issue to grapple with: adaptation.
In relation to climate change mitigation, the new incentives for clean investment and new related partnerships launched by the commission are of course urgently needed. But the elephant in the room is the absence of any new framework to address the losses in productive capacity induced by climate change.
These related issues will only become more pronounced in the coming years, especially as some big players renege on their climate change commitments — risking a more hostile climate for us all. From this perspective, given the built-in effects of climate change we already face, the tensions between sustainability and growth reduce dramatically.
Jodie Keane
Senior Research Fellow
International Economic Development Group, London SE1, UK