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Different way to solve the Climate change
The US and Europe are trying to find a solution to the Climate change. Only the future can tell which way is the most effective.
It’s going to be interesting to see once the European Parliament has put numbers behind the new regulations.
Below you’ll find a synopsis of the new rules.
The new rules adopted by the European Parliament regarding corporate sustainability due diligence and climate transition plans will have significant implications for both European and non-European enterprises. Here’s a short summary:
For European Enterprises:
- Enhanced Responsibility: European companies will be required to identify and address the impacts of their activities on human rights and the environment, promoting responsible business practices.
- Climate Transition: The inclusion of climate transition plans aligned with the Paris Agreement objectives will compel companies to set targets and take actions to reduce greenhouse gas emissions, contributing to Europe’s climate goals.
- Financial Sector Accountability: The rules extend to financial services providers, ensuring that asset managers and investors consider sustainability factors in their investments, driving sustainable practices throughout the financial sector.
- Incentives for Directors: Companies with over 1,000 employees will need to tie directors’ variable compensation to the performance of climate transition plan targets, aligning executive incentives with climate action.
For Non-European Enterprises:
- Compliance Requirements: Non-European companies with revenues earned in the EU above certain thresholds will also need to follow the rules, expanding the scope of accountability beyond European borders.
- Due Diligence and Impact Assessment: Non-European companies operating in Europe will be required to integrate due diligence into their policies and identify and mitigate adverse human rights and environmental impacts, promoting responsible business practices.
- Sanctions and Reputational Risks: Non-compliance with the rules could result in sanctions, fines, or bans from public procurement in the EU, posing financial and reputational risks for non-European enterprises.
Overall, these rules aim to foster a culture of corporate responsibility, sustainability, and climate action for both European and non-European enterprises operating in Europe. It emphasizes the importance of considering the impacts on human rights, the environment, and climate change in business operations and value chains, ultimately working towards a more sustainable and equitable future.