Presented on December 11, 2019 by the European Commission, the European Green Deal (or Green Deal) is an environmental roadmap for the European Union. Its main ambition is to make Europe the first carbon neutral continent by 2050 by transforming different sectors of the economy and society.
Why is the Green Deal necessary for Europe?
The future of Europe depends directly on the health of our planet. Dependence on fossil fuels is causing global warming with dramatic consequences for the economy and humanity.
The global economic system is too energy-intensive: according to the WWF, 1.7 Earths would be needed to regenerate what humanity currently consumes. Like the Green Deal, the EU has therefore put in place a climate change mitigation and adaptation strategy for the entire financial and economic system, in order to ensure lasting economic prosperity.
What are the main objectives of the European Green Deal?
The Green Deal has numerous goals, spread over 8 main challenges :
- Climate
- Energy
- Circular economy
- Dwellings
- Mobility
- Feeding
- Biodiversity
- Pollution
Each challenge is associated with objectives (for example, by 2030 or 2050), as well as flagship measures to achieve these objectives.
In the table below, you will find a non-exhaustive list of measures and objectives for some issues.
All of these goals and measures guide the economic and financial system globally towards greater sustainability, to lead to a more sober economy that emits less CO2, and less toxic for citizens and ecosystems.
The 3 benefits of the Green Deal for businesses
Although the Green Deal involves structural changes in the European economy, it represents a strategic opportunity for businesses. By aligning themselves with the goals of the Green Deal, European businesses are getting ahead of the curve. and limit the risks associated with climate change.
These 3 advantages are:
- Opportunities for innovation and competitiveness
- Job creation and economic development
- Reducing risks and improving resilience
1. Opportunities for innovation and competitiveness
The ecological transition stimulates innovation and competitiveness by encouraging the development of new technologies. The hydrogen, battery, solar and electric mobility sectors are, for example, in full expansion. Financing opportunities are opening up for companies in sectors corresponding to the challenges of the Green Deal, such as for example the European Hydrogen Bank which has invested 1.2 billion euros to structure a European hydrogen market.
More broadly, the EU has earmarked 1 trillion euros over ten years to finance the green transition. For example, the 2020 European recovery plan”NextGenerationEU” devoted 30% of its budget to sustainable investments.
2. Job creation and economic development
The transition to a low-carbon economy is a engine of growth and job creation. New jobs are emerging in strategic sectors such as building, transport and energy.
In France, theADEME Believes that the ecological transition will generate 540,000 jobs by 2030, and up to 1 million jobs in 2050. For its part, The Shift Project mentions a net balance of 300,000 jobs created, taking into account the jobs destroyed and generated.
3. Reducing risks and improving resilience
Anticipating regulatory changes and integrating sustainable practices allows companies to limit their exposure to various financial and operational risks. These risks include:
- The depreciation of assets linked to new regulations restricting the use of fossil fuels
- The reduction in the lifespan of assets, replaced by less polluting production technologies imposed by regulations
- The difficulty of accessing finance for certain polluting activities, compromising operational continuity
- The obligation to record a provision for pollution control
- A drop in turnover due to the evolution of consumer preferences towards more environmentally friendly products
- Insurance difficulties for certain activities with a high environmental impact
(Source: PWC)
The CSRD: a regulatory tool at the service of the Green Deal
To ensure the monitoring and achievement of the objectives of the Green Deal, the European Commission is establishing new directives governing the economic and financial system, and the CSRD (Corporate Sustainability Reporting Directive) is one of them.
This directive aimed at strengthening the transparency and comparability of ESG data published by companies, imposes a more rigorous reporting framework for companies. Thanks to ESRS standards, it makes it possible to assess the impact of organizations on the environment and people, while integrating The principle of double materiality.
Beyond a compliance exercise, the CSRD represents a real strategic opportunity for European companies. It is an opportunity for them to do a Overview of their economic model in relation to environmental and social risks, and to structure a sustainability strategy in order to ensure the continuity of their business.
Thanks to the CSRD, companies set ambitious goals whose performance they manage year after year, in order to improve their social and environmental impact.
Conclusion
The European Green Deal is a turning point for the sustainable transition of our economy. By showing strong ambitions, Europe is paving the way for a resilience strategy in the face of current climate challenges.
Businesses can take advantage of the Green Deal by taking transformative actions now. Among these measures, CSRD is the starting point for structuring an effective sustainability approach.
Do you need help to structure your CSR strategy? Our team is here to guide you, contact us!
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FAQs
Find answers to common questions about CSRD and Kiosk
The CSRD or Corporate Sustainability Reporting Directive is the new European directive which aims to impose and better regulate corporate sustainability reports.
It makes companies more transparent, with standardized ESG reporting standards called ESRS (European Sustainability Reporting Standards)
The application of the Corporate Sustainability Reporting Directive is progressive. Here is a summary table.
| Effective year | Businesses impacted | Standard |
|---|---|---|
| 2025 (over the financial year 2024) | Listed companies with more than 500 employees | ESRS |
| 2026 (sur l’exercice 2025) | Autres grandes entreprises de plus de 1000 salariés | ESRS |
| 2026 (over the financial year 2025) | Businesses that meet two out of three criteria: | VSME |
| 2027 (over the year 2026) | SMEs listed on the stock exchange | VSME |
| 2029 (over the fiscal year 2028) | Non-European companies with at least €150M in turnover on the European market | ESRS |
Want to know when your business is impacted? Use our regulatory monitoring tool to find out.
The "omnibus" bill is a recent initiative by the European Commission aimed at reducing the scope of the CSRD directive. It proposes, in particular, to raise the application thresholds: only companies with more than 1,000 employees would be affected, compared to 250 previously.
It promotes the adoption of the VSME framework to reduce the reporting burden on SMEs and mid-cap companies.
The VSME (Voluntary Sustainability Reporting Standard) is a voluntary European standard designed to help unlisted small and medium-sized enterprises (SMEs) structure and communicate their sustainability initiatives. Developed by EFRAG, this standard offers a lighter framework compared to ESRS standards, covering ESG aspects. It allows in particular to:
- Harmonizing sustainable reporting practices in Europe
- Facilitate the response to the expectations of business partners
- Improving access to responsible financing
It aims to harmonize sustainable reporting practices, facilitate meeting the expectations of business partners, and improve access to responsible financing. Although not mandatory, adopting VSME allows SMEs to demonstrate their commitment to sustainability and anticipate future regulatory developments.
- Complete the preliminary steps for the CSRD
These steps are dual materiality analysis and gap analysis. They will help you understand the material issues, impacts, risks, and opportunities for your business. They will also allow you to create a roadmap based on what you have already achieved.
Check out our article on double materiality here.
- Compile your data and produce your indicators
Centralizing sustainability data is essential for your compliance, particularly to facilitate understanding and consistency when producing quantitative indicators.
- Produce your detailed report in XHTML format with XBRL tags
Thanks to its tagging and visualization technologies, Kiosk guarantees a very high level of consistency.
Find our article on XBRL tagging here .
- Audit your data
At the end of these steps, your sustainability report is ready to be audited by an Independent Third Party Organization (ITO).
Kiosk supports your compliance journey throughout this process. For more information on these steps, we invite you to contact our team.
CSRD compliance requires companies to:
- understanding the 12 ESRS and 82 disclosure requirements
- the collection of more than 1,000 data points
- the calculation of 50-147 quantitative indicators
- tagging 4,000 items in the final report
Kiosk is a software that allows companies to save 5 months on the preparation of their CSRD report by automating the most time-consuming steps.
- First of all, the security of your data is our priority.
- All data is stored in France, in Paris, via our French hosting provider.
- During transit, your data is encrypted in SSL/TLS from the user's browser to our servers guaranteeing the security of communications.
- Data is also encrypted at rest, both on the database and on file storage, protecting the data in the event of a leak or attempted theft.
- Kiosk's technical teams are the only ones who can access your data.
- Kiosk is in the process of ISO27001 certification.
- Our technical support is available 24/7.