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The European Union set itself on a course to consolidate all previously fragmented environmental, industry, energy, climate and other relevant policies into one integrated framework: the EU Green Deal (the EGD).
The EGD aspires to put the bloc on a pathway to climate neutrality by mid-century and to decouple economic growth from the extensive use of non-renewable natural resources. These policy proposals amount to the largest-scale legislative reform that the EU has ever undertaken, and they will dictate the policy-making agenda of the EU for years to come. They are also expected to entail massive investments and redirection of capital flows, estimated at €1t.
EGD’s framework
The EGD will create foundations for a new European growth strategy, in which sustainability goals are driven by policies and regulations. Moreover, it is expected to serve as a laboratory for innovative climate and environmental policymaking, paving the way for similar initiatives to be undertaken in other parts of the world.
The EGD rests on several key elements:
- Increasing climate action
- Clean energy
- Circular economy
- Sustainable industry
- Sustainable buildings/renovations
- Sustainable transportation
- Agricultural transformation
- Protecting ecosystems and biodiversity
- Eliminating pollution
- Sustainable finance
- Sustainable corporate governance
The EDG's toolbox
The EGD’s toolbox covers a variety of instruments and approaches:
- administrative tools (substance restrictions, labeling requirements as well as emissions reduction or recycling targets)’
- governance measures (new obligations for management boards, due diligence requirements, and extended producer’s responsibility);
- economic interventions (subsidies, material / emission taxes, carbon tariffs, deposit-refund systems, tradable recycling credits, and upstream emission offsets);
- financial and market-based incentives (green procurement, green premiums, carbon contracts for difference).
Business implications
The EU Green Deal will leave no sector of the economy unaffected, becoming a driving force for new business models and also dictating new compliance obligations. With its extraterritorial outreach through measures like CBAM or extension of the EU ETS to the international maritime sector the implications of the EGD will be global.
Within the EU and beyond, the EGD will prompt businesses to reduce their carbon footprint, create business models that account for circular economy frameworks, and invest and innovate in renewable energy and other clean technologies. Furthermore, the EGD will require companies to account for both environmental and social impacts in their entire supply chains.
EY’s European Green Deal Center of Excellence
EY’s European Green Deal Center of Excellence is a global leader in a comprehensive EGD regulatory advisory.
Because the European Green Deal is not a monolithic concept, the traditional lines between energy, finance, corporate governance and environment fade, requiring a multidisciplinary approach. Our Center of Excellence is a focal point of contact around the EGD measures and offers a full suite of solutions that can help clients navigate their regulatory complexities.
The EGD diagnostics
We help map out major vectors of impact of the EGD, highlighting risks and opportunities, as well as assess preparedness for the upcoming policy changes.
The EGD legislative monitoring
As the EGD is set to evolve, we support clients in keeping abreast of regulatory changes. We also offer regular status / update sessions to discuss recent developments and their impact on an organization.
Predictive regulatory modeling
We help organizations understand the impact of EGD policies in quantitative and qualitative terms and assess the implications of these policies for business models, planned investments, and corporate strategies.
Advocacy
Advocacy is often a fast-paced process that allows little time to react to policy proposals. It requires resources to track developments and navigate political and legislative complexities. Back-office support is needed to quickly analyze, calculate, and re-calculate the impact of various policy design options as they emerge. We can support organizations in formulating and substantiating their positions within the legislative consultation processes.
EU Green Deal Officer
Either as a temporary or permanent solution, we can serve as an external EGD officer for organizations that have not established such a function but would like to take advantage of having access to the top class expertise.