Bumper week for sustainability-related policy in the EU
A whistle-stop tour of developments at the ECB, Commission, Parliament and other EU bodies
It’s been a busy week for green policy and regulation in Europe, as things begin to fully ramp up again in Brussels after the EU elections and the summer break.
On Friday, the European Central Bank reiterated its plan to consider ‘greening’ its monetary policy to stimulate low-carbon lending in the real economy. In a speech, ECB board member Frank Elderson said there were “compelling reasons” to update the low-cost, long-term funding the ECB provides Europe’s commercial banks, known as TLTROs, so it supports green lending “or exclude[s] non-green lending in the future”. He said it would mirror similar moves in the past to prevent real-estate bubbles.
Elderson also noted that the ECB was “continuing to explore options to further incorporate climate considerations into our collateral framework” in partnership with the European Securities and Markets Authority and the European Banking Authority. “Within our mandate, we will also look into addressing additional nature-related challenges,” he added.
The European Commission has been busy too. Real Economy Progress reported on calls for it to rethink the green taxonomy and the Corporate Sustainability Reporting Directive earlier this week, but it also published additional guidance on the EU’s controversial Deforestation Regulation.
At the same time as it announced it was delaying the law’s implementation, it released a document addressing 11 topics, including timeframes, traceability issues, and clarifications about how the rules should be applied across business activities and products.
The Commission has added more than 40 new responses to its FAQs for the regulation, too.
On the Ecodesign for Sustainable Products Regulation, it published an FAQ clarifying the timelines for delegated acts, plans for a stakeholder engagement forum and more about the Digital Product Passports.
In Parliament, EU policy advisors are asking for input into the guidelines for the Corporate Sustainability Due Diligence Directive.
On LinkedIn, Greta Koch, who supports MEP Axel Voss and is a champion and architect of CS3D, wrote: “In the Parliament, CS3D is over and done with. However, companies and other stakeholders keep asking us about clarifications on parts of the text, or hint at problems that are not addressed by the Directive.”
She said that the official guidelines for the Directive wouldn’t be ready for a while – the deadline isn’t until 2027 – but that she would collect questions and submit them to the relevant policymakers and experts to help with implementation in the meantime. Specifically, she wants to know the biggest hurdles for companies; what information the official guidelines should provide; and where more legal clarification is needed.
Her LinkedIn post can be found here.
Meanwhile, the Committee of European Auditing Oversight Bodies issued its final guidelines on limited assurance for sustainability reporting. Requested by the European Commission, they are intended to help auditors and others provide suitable assurance for CSRD reports. National authorities will be able to recommend or require the use of these guidelines, and they will feed into rules expected to be issued by the Commission by the end of 2026.
Standards for reasonable assurance are due in 2028. In September, the International Auditing and Assurance Standards Board approved standards for sustainability assurance, which are expected to be published in their finalised form in December.
And finally, the EU’s watchdog criticised the bloc’s flagship Common Agricultural Policy (CAP), saying it isn’t aligned with net zero and doesn’t include sufficient ways of assessing green performance.
The European Court of Auditors published its findings on Monday, concluding that “the plans are greener than in the previous CAP, but do not match the EU’s ambitions for the climate and the environment”. It told the Commission to promote examples of good practice in the area, explain the CAP’s contribution to the overarching Green Deal, and strengthen monitoring on climate and the environment.
The CAP accounts for 31% of the EU budget, and the latest version runs from 2023 to 2027.