Navigating EU Disclosure & Reporting Initiatives

How is the EU leading the drive towards net zero?

EU actions will require banks, investors and companies to collect and standardise granular ESG data and engage in rigorous reporting. The overall aim is to increase transparency, with the desire of boosting capital flows to ESG activities. 

What is the EU Green Deal?

This is the broad umbrella under which the EU’s ESG initiatives are being launched. It is a transition initiative introduced in 2019 and funded by investments of at least €1tn over 10 years, with private finance central to the plan's success. Its aim is to make the EU climate-neutral (net zero) by 2050. The goals are enshrined in the European Climate Law, which entered force in July 2021. 

The EU’s Green Deal is actively pushing to:

- Decarbonise the energy sector; 

- Renovate buildings to make them energy-efficient 

- Support green innovation in industry

- Create world-beating cleantech and clean product companies, and

- Transition to clean private and mass transportation

30% of the programmes under the €2tn Multiannual Financial Framework and the post-Covid NextGenerationEU programme, is being allocated to projects in support of climate action.

At the same time, the EU wants transition to be just and inclusive. To this end, it established the Just Transition Mechanism, a one-hundred billion euro funding programme that’s part of the Green Deal. It will support the most vulnerable to transition through: 

- New skills training

- Creating green employment

- Improving energy-efficient housing

- Pushing for an end to energy poverty, and 

- Creating better access to affordable clean energy

The Just Transition Mechanism has three pillars: 

• The Just Transition Fund
• InvestEU programme
• European investment Bank’s Public Sector Loan Facility

Also as a part of the EU Green Deal, a Circular Economy Action Plan was created to transform the life-cycle of the products we use towards sustainable products. 

Additional Green Deal programmes cover:

- Biodiversity

- A methane strategy 

- A chemicals strategy, aiming at a toxic-free environment, and

- Offshore renewable energy

What is the Fit for 55 Initiative?

The purpose of this initiative is to ensure that progress towards the climate-neutral by 2050 goal is maintained. 

It is a wide-ranging package of measures adopted in 2021 to align policies around climate, energy, land use, transport and taxation. 

Included in the package are measures to: 

- Tighten up the EU Emissions Trading Scheme and expand it to new sectors like shipping

- Increase the use of renewable energy

- Push for greater energy efficiency

- Accelerate the roll-out of low-emissions transport and supporting infrastructure

- Prevent carbon leakage and expand natural carbon sinks

- Align tax policies in support of the Green Deal

The package also set in motion a swathe of updates to regulations and directives.