In recent years, talk about corporate sustainability It also means knowing how to orient oneself in a European regulatory framework in Continuous evolution.
With the Green Deal, theEuropean Union has started a structural change involving businesses, institutions and citizens, setting ambitious goals and introducing New rules destined to redefine the way in which we produce and consume.
In this article, we will give an overview of what the European Green Deal is, what its objectives are, what regulations it consists of and what advantages it can bring to companies. Let's get started!
{summary#bullet-1}
What is the European Green Deal
The European Green Deal represents the growth strategy of the European Union, designed to guide the continent towards a more sustainable economic model, competitive and fair.
Presented in 2019, it has started an ambitious path that aims to achieve climate neutrality of the European Union by 2050, in line with the Paris Agreement and with the aim of containing the global warming within +1.5°C compared to pre-industrial levels.
To achieve this goal, the Green Deal involves all sectors of the economy, from energy to transport, from industry to agriculture, to finance, promoting structural reforms, innovation and targeted investments.
This is not a simple strategic vision: in recent years, European institutions have translated the principles of the Green Deal into binding regulations, applied in all Member States.
This strategy represents, for all intents and purposes, the pillar on which the Europe's sustainable transition, a profound transformation that requires joint commitment of businesses, public administrations and citizens.
{summary#bullet-2}
The 6 key objectives of the European Green Deal
To create a real and lasting transformation, the European Green Deal is based on 6 key objectives. It's about strategic pillars that guide the Union's action towards a climate-neutral future, fairer and more resilient.
Let's see what those objectives are.
1. Climate neutrality
Transforming Europe into the first continent with zero climate impact by 2050 represents the main objective of the Green Deal. This will have to happen through a drastic reduction of emissions of greenhouse gases.
2. Circular economy
Abandon the linear model of “produce-consume-dispose” to adopt an economy where products are designed to last, be reused, repaired and recycled. In this way, we want to reduce waste and preserve natural resources, valuing every phase of the life cycle of goods and materials.
3. Clean industry
Encourage the transition to a more sustainable, energy efficient and competitive industry both on the European and global markets. Technological innovation and the decarbonization of production processes are at the center of this transformation.
4. Healthier environment
Combating pollution, protecting biodiversity and restoring ecosystems are fundamental actions to ensure a healthier environment and leave a safer ecosystem for future generations.
5. More sustainable agriculture
Support agricultural practices that respect the environment and soil health, while continuing to ensure the production of healthy, safe and accessible food. With this objective, the Green Deal intends to recognize agriculture as a fundamental hub in the ecological transition.
6. Climate Justice and Equity
Ensure that no one is left behind, offering support to the most vulnerable communities, territories and people in the face of the economic and social changes that the transition entails.
{summary#bullet-3}
“Fit for 55” package: what it is and what does it include
To give concrete implementation To the objectives of the European Green Deal, the European Union has introduced the legislative package 'Fit for 55 ', proposed in 2021.
The name refers to the central objective of the Green Deal, to reduce net greenhouse gas emissions by at least 55% by 2030, compared to the levels of 1990. A crucial step to start Europe towards the result of climate neutrality by 2050.
The package consists of a series of regulations and directives that aim to:
- guarantee a Right transition and socially equitable;
- strengthening the competitiveness of the industry European and its capacity for innovation;
- protect European businesses from possible distortions of international competition;
- consolidating the role of the EU as a global leader in the fight against climate change.
Let's see what are the main measures of the package.
Emissions Trading System (EU ETS)
The EU ETS is the main European instrument for reducing emissions, active since 2005. This is a carbon market where energy-intensive industries and the energy production sector buy and trade emission allowances. The system sets a ceiling on overall emissions and encourages companies to reduce them, rewarding those who pollute the least.
With the Fit for 55 package, the EU ETS has been updated (EU ETS 2), extending the system also to the construction and transport sectors, which are particularly emissive.
Border Carbon Adjustment Mechanism (CBAM)
This mechanism aims to prevent European decarbonization efforts from being thwarted by an increase in emissions in non-EU countries. In practice, it introduces a carbon price on certain CO₂ intensive imports, such as steel, cement and fertilizers, promoting fairer and more sustainable competition globally.
Social climate fund
It consists of a fund created to support families, microenterprises and vulnerable users in facing the economic impact of the new ETS system extended to buildings and transport. A fundamental measure to reduce inequalities and promote social inclusion on the path to climate neutrality.
{summary#bullet-4}
Beyond the Fit for 55 package: the other key regulations of the Green Deal
The European Green Deal is a ambitious and complex project, which goes beyond just the Fit for 55 package.
Around this strategy, the European Union has developed a series of regulations and directives that address specific aspects of the ecological and social transition.
Let's see what they are.
Farm to Fork Strategy
The 'From producer to consumer' strategy aims to make European food systems fairer, healthier and more sustainable. It promotes agriculture with a lower environmental impact, encourages responsible consumption and aims to reduce the use of pesticides, fertilizers and antibiotics, while ensuring food security and access to food for everyone.
RepowerEU
Launched in response to the energy crisis exacerbated by the war in Ukraine, the RepowerEU plan accelerates the transition to energy independence of the EU. It aims to reduce dependence on imported fossil fuels, focusing on renewable sources, energy efficiency and diversification of supplies.
Nature Restoration Law
This legislation introduces binding objectives for the restoration of degraded ecosystems across Europe. It concerns forests, wetlands, watercourses, pollinators and agricultural areas, with the aim of reversing the loss of biodiversity and strengthening the resilience of ecosystems to climate change.
EUDR (EU Deforestation Regulation)
Entered into force in 2023, it prohibits the sale on the European market of products linked to deforestation and forest degradation, such as soybeans, cocoa, coffee, palm oil, timber and beef. It is a concrete measure to combat global deforestation and empower supply chains.
CSRD (Corporate Sustainability Reporting Directive)
The Sustainability Reporting Directive significantly extends non-financial reporting obligations for companies. Introduced to improve the transparency and comparability of ESG performance, it will require an increasing number of companies to publish detailed information on environmental, social and governance impacts.
CSDDD (Corporate Sustainability Due Diligence Directive)
This directive establishes the obligation for large companies to identify, prevent and mitigate negative impacts on human rights and the environment along the entire value chain. It is a decisive step in integrating sustainability into corporate governance processes and strategic choices.
EU taxonomy
The European Taxonomy regulation defines which economic activities can be considered truly environmentally sustainable. It provides a common language to guide investments, public policies and business strategies, counteracting greenwashing and promoting sustainable finance.
Learn how sustainability is changing the financial sector through our free webinar
To complete this regulatory framework, we add the Omnibus package, an important update of the European legislative landscape on sustainability. Presented by European Commission ad Early 2025 is currently being approved by all European bodies.
The package aims at simplify and harmonize ESG reporting obligations for companies, making more clear and accessible the overall regulatory framework.
In particular, the Omnibus Package brings together and coordinates three key regulations, the CSRD, the CSDDD And the EU taxonomy, aiming to keep the ambition of the Green Deal high, but without compromising competitiveness of European companies.
{summary#bullet-5}
The 5 advantages for companies in adapting to the new regulations provided for by the Green Deal
Adapting to the new European regulations may represent, especially in the initial stages, a significant challenge for businesses.
The adoption of more sustainable practices it often requires investments, operational adaptations and a continuous commitment to monitoring its environmental and social performance.
However, the benefits in the medium to long term they are far from marginal. The European Green Deal is not only a set of obligations, it is also aconcrete opportunity for growth, transformation and strategic positioning for companies that choose to act early and obtain a competitive advantage compared to competitors.
Here are the 5 main benefits for businesses.
Increased competitiveness
The companies that invest today in the ecological transition will be those best positioned tomorrow. Energy efficiency, the reduction of waste and the adoption of processes that are more transparent in terms of aspects ESG they generate tangible competitive advantages on the market, especially in an increasingly stringent regulatory environment.
Opening to new markets
More and more customers, partners and investors require high ESG standards in order to promote a sustainable value chain. Aligning with the objectives of the Green Deal allows access to international supply chains, to respond to the requests of major players and to strengthen its presence on global markets.
Innovation and growth
Environmental regulations push companies to innovate by promoting more sustainable products, new business models and digitalization of processes. The ecological transition is, in fact, also a lever for business development and modernization.
Access to finance
Access to public funds, European incentives and private investments is increasingly linked to sustainability. Companies that demonstrate that they have a clear and measurable environmental strategy will have greater opportunities to attract capital and subsidized financing.
Image and reputation
Being an active part of the climate transition strengthens the company's reputation in the eyes of customers, stakeholders and employees. Transparent and consistent communication on sustainability becomes a distinctive element, capable of generating trust and value over time.
