Preparing Your Business for the EU Green Deal: Compliance Meets Innovation
The EU Green Deal, launched by the European Commission in 2019, is a powerful plan guiding businesses towards more sustainable practices. This plan is focused on addressing climate change and promoting sustainability. As businesses navigate swaths of new legislation under the plan, it is clear that circularity and eco-design goals outlined in the EU Green Deal will impact businesses at all levels.
This piece examines the critical strategies that businesses, regardless of their size, must adopt. It highlights the importance of integrating circularity and eco-design principles into business models as key steps towards achieving the ambitious targets outlined in the EU Green Deal.
EU Green Deal Brings Sustainability Compliance to the Forefront
The EU Green Deal, approved in 2020, has brought forth a series of legislative initiatives aimed at transitioning the EU economy to a sustainable model. One significant set of regulations, adopted in May 2023, focuses on preventing products on the EU market from contributing to deforestation. A central piece of the EU Green Deal legislative framework is the European Climate Law. To reach the 2030 sustainability target, the Commission proposed a package known as Fit for 55 in 2021, comprising 13 new and revised laws. These laws aim to reduce greenhouse gas emissions by a minimum of 55%, increase the share of renewable energy above 32%, and improve energy efficiency by at least 32.5%.
Businesses will need to comply with these regulations by integrating sustainable practices throughout every level of their operations, from design to raw material sourcing to production.
The EU Green Deal: Global Impacts and Collaborative Sustainability Initiatives
Global policymakers are focusing on sustainability, circularity, eco-friendly products, and ESG (Environmental, Social, and Governance) principles. The European Union (EU) is actively participating in discussions with policymakers outside the EU, sharing knowledge, experiences, and effective strategies. This cooperative interaction promotes the exchange of ideas and encourages the harmonization of sustainability efforts beyond Europe.
The EU's goal is to establish a more cohesive and influential worldwide approach to sustainability by engaging with non-EU policymakers about new laws and shared experiences. As such, companies in the EU should be aware of global sustainability trends, particularly in areas where their supply chains are located. This awareness allows them to predict and adhere to emerging regulations, align their sustainability practices with worldwide standards, and enhance their overall sustainability performance.
The chart below provides examples of legislation under the Green Deal or inspired by it, organized by impact and region.
How to Prepare Your Supply Chain for the EU Green Deal
Here are a few key ways in which the EU Green Deal will impact your business.
Governance and Regulatory Compliance
Failure to adhere to due diligence regulations can lead to penalties, harm to reputation, and restricted market access. Companies and their leaders must stay informed about changing regulations and ensure they are followed throughout all aspects of their business. This requires the establishment of internal management structures, clear assignment of responsibilities, and mechanisms for transparency and disclosure.
Several pieces of legislation lay out new requirements for sustainability and due diligence reporting. These include the EU Corporate Sustainability Reporting Directive (CSRD) and the EU Corporate Sustainability Due Diligence Directive (CSDDD).
Circular Business Models
Businesses will need to investigate innovative business frameworks that emphasize recycling, mending, and sharing. This might include setting up repair hubs or partnering with other companies to develop circular systems. Regulations such as the EU's Eco-design for Sustainable Products Regulation (ESPR), France's AGEC Law, and the Green Claims Directive are key considerations in this context.
Product Design for Circularity
Companies will need to embrace design guidelines that prioritize circularity and sustainability. This means utilizing materials that are ethically sourced, recyclable, or derived from recycled sources, or easily reusable. It also involves designing products that can be disassembled and considering the complete lifecycle impact during the design process. Regulations such as those listed below should be taken into account.
EU Eco-design for Sustainable Products Regulation (ESPR)
EU Deforestation Regulation (EUDR)
EU Forced Labor Regulation
France's AGEC Law
EU Common Rules Promoting the Repair of Goods (Right to Repair)
Green Claims Directive
Supply Chain Transparency and Traceability
Companies will need to guarantee transparency and traceability throughout their supply chains, from the acquisition of raw materials to the processes of manufacturing and distribution. It will be critical to prioritize the use of sustainable materials and suppliers, while effectively managing social and environmental repercussions. This should be done in compliance with regulations such as:
EU Corporate Sustainability Reporting Directive (CSRD)
EU Corporate Due Diligence Duty Directive (CSDDD)
French Duty of Vigilance Law
German Supply Chain Law
EU Deforestation Regulation (EUDR)
EU Forced Labor Regulation
Green Claims Directive
Carbon Border Adjustment Mechanism (CBAM)
Extended Producer Responsibility
The EU is implementing regulations that will obligate manufacturers to take responsibility for their products throughout their entire lifecycle. This includes the collection, recycling, or appropriate disposal of their products once they reach the end of their useful life. Producers may be required to establish return systems or engage in recycling programs. These directives and regulations include:
EU Waste Framework Directive
EU Extended Producer Responsibility (EPR)
EU Packaging and Packaging Waste Directive
EU Batteries Regulation
EU Strategy for Sustainable and Circular Textiles
New EU Rules on waste shipments
Green Claims Directive
EU Eco-design for Sustainable Products Regulation (ESPR)
Consumer Empowerment
Consumers are showing a rising demand for products that are sustainable and ethically manufactured, and lawmakers are closely examining companies and their product claims to prevent greenwashing. Companies will have to adhere to more stringent rules when making green claims and must provide trustworthy information to consumers. This must be done in accordance with the EU's initiative on Empowering Consumers for a Green Transition, the EU Green Claims Directive, and French Environmental Labeling regulations.
QIMA Is Here to Help
The principles of circularity and eco-design have evolved from being niche ideas to becoming crucial for businesses that operate within or interact with the EU market. The EU's Green Deal and regulatory initiatives will affect companies at all levels, from managing supply chains to designing products, meeting consumer expectations, and handling product end-of-life scenarios. Embracing a circular economy is not just a requirement, but also an opportunity for businesses to tap into the expanding market demand for sustainable products.
QIMA is equipped to help your business prepare for these changes and maintain compliance by offering comprehensive supply chain management services, from production line monitoring and environmental audits to supply chain risk mapping and carbon footprint calculation. Meet regulatory standards while also capitalizing on the growing consumer demand for sustainable and ethically produced goods. By partnering with QIMA, businesses can navigate the complex landscape of EU regulations with peace of mind.
Get more information by downloading our whitepaper, Understanding The EU Green Deal: A Comprehensive Guide for Businesses, or contact us to learn how we can support you in compliance and more.
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