Corporate sustainability, net zero and the new European Commission
New lawmakers are being tasked with managing everything from the Clean Industrial Deal to CS3D
Ursula von der Leyen spelled out her hopes for the next five years of EU policy-making yesterday, revealing her choice for Commissioners.
The President of the European Commission, who is entering her second term, named the 26 senior figures she wants to help her drive the forthcoming legislative agenda, and outlined their priorities.
In terms of corporate sustainability and climate change, there is still a lot to be worked through, but some things are clear.
Green socialist expected to lead on the transition
As expected, von der Leyen plans to give centre-left Teresa Ribera the most important role: Executive Vice President for the Clean, Just and Competitive Transition.
Ribera has twice served as Spain’s environment minister, and is a lifelong climate advocate. She led national efforts to shutter coal mines, pushed through anti-pollution rules in Europe, and co-led the EU delegation at last year’s COP climate summit.
In her mission letter, which serves as a job description, von der Leyen told Ribera she should coordinate the work on the EU’s Clean Industrial Deal, which she wants in place within the first 100 days of her mandate.
Reducing energy prices, weaning Europe off fossil fuels, and strengthening the focus on natural capital and a circular economy will also be priorities.
“We need to provide incentives for nature-positive actions and ensure that we invest in our biodiversity,” von der Leyen said. “It will also be essential to embed the environmental-health nexus in all of our policies.”
Some believe Ribera’s mammoth mandate, which also includes being in charge of competition policy, is a strategic attempt to reassure the centre-right she won’t take too much ownership of any issues, by ensuring she’s spread too thinly.
Supported by pro-business incumbent
Ribera’s socialist position will also be tempered by the fact her climate duties will overlap with another of von der Leyen’s nominations: her co-lead for the COP28 negotiations, Wopke Hoekstra.
Dutch representative Hoekstra was the EU’s climate commissioner until this summer’s elections, having taken over the job when Frans Timmermans resigned last October.
He is set to resume the role under Ribera, albeit under the slightly different title of Commissioner for Climate, Net Zero and Clean Growth.
A conservative and former finance minister, Hoekstra’s CV also includes roles at McKinsey and Shell, and his appointment is likely to reassure skeptics that the EU’s pursuit of its climate goals won’t be ‘anti-business’.
Hoekstra’s mandate also includes taxation policy, which may see him pursue taxes for aviation fuel – something he has called for already. He’s also been vocal about the need to deal with China’s dominance in Europe when it comes to the provision of climate solutions, particularly renewable energy hardware.
France in charge of industrial strategy
Meanwhile, France’s Stéphane Séjourné will be in charge of coordinating the EU’s new industrial strategy, including working with Ribera and Hoekstra on the Clean Industrial Deal.
If approved, the outgoing French foreign minister – who was a last-minute nomination – will be required to build “clean transition dialogues” with companies and other stakeholders, establish “targeted solutions for each value chain”, and present an Industrial Decarbonisation Accelerator Act to boost cleantech and renewables in the region.
He will also lead on the Net Zero Industry Act.
Séjourné’s mission will include ensuring that existing regulation doesn’t “unjustifiably” hinder the development of Europe’s smaller companies, and reviewing public procurement rules. Some observers think the latter will see him address long-standing complaints that the public sector doesn’t systematically integrate sustainability when awarding contracts.
He will also be involved in the development of the Circular Economy Act, and packages relating to key sectors like chemicals, metals and critical raw materials.
Due diligence rules
The Corporate Sustainability Due Diligence Directive wasn’t mentioned in anyone’s job description yesterday, but it is expected to fall under the remit of Ireland’s Michael McGrath, who von der Leyen wants to be in charge of justice in the new Commission.
McGrath is a former finance minister, and has no obvious sustainability credentials, so some MEPs will want more clarity on the future of the file before signing off on the nomination.
Cutting reporting requirements
All the candidates’ mission statements mention the need to streamline Europe’s regulatory requirements, as per Mario Draghi’s advice last week. But von der Leyen wants Valdis Dombrovskis to lead those efforts.
As head of Economy, Productivity, Implementation and Simplification, he will make proposals for how to lessen the reporting burden and stress-test existing legislation to make sure it is efficient and effective.
Once in charge of the EU’s sustainable finance agenda, Dombrovskis is a well-seasoned, uncontroversial figure in the Commission, and – hailing from Latvia – doesn’t represent a Member State with strong national interests in boosting or reducing sustainability reporting requirements.
In a sign of how important cutting red-tape will be over the next five years, he will report directly to von der Leyen.
Next steps
All 26 candidates will now be grilled by MEPs (the precise date of the hearings should be announced later this week), who will try to extract promises and commitments out of them, before approving or vetoing their selection.
