The European Union’s decision to dilute its corporate sustainability rules could hurt the bloc’s efforts to fight climate change and risks rewarding companies with a poor track record, environmental NGOs and clean energy advocates say.
In a deal clinched in the early hours of Tuesday, EU leaders, the European Commission and the Parliament agreed a series of amendments to the Corporate Sustainability Due Diligence Directive (CSDDD), which will require larger companies to identify and address any environmental or human rights violations in their supply chains.
The amendments, which still need formal approval by the Parliament and EU member states, mean the due diligence requirements will apply to far fewer companies than initially targeted and maximum penalties will be reduced from 5% to 3% of a company’s annual global turnover.
In another change, the EU also scrapped a requirement for companies to publish climate transition plans setting out how they would make their business model compatible with the Paris Agreement.
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The EU Commission said the changes, which follow months of corporate lobbying, US pressure and interventions by France and Germany, will remove all requirements for many smaller companies and introduce greater flexibility for larger companies, which will help to ease administrative burdens on businesses and drive investment.
But climate campaigners and clean tech industry representatives said the watered down rules were a setback for European efforts to clean up supply chains and reduce emissions.
“By deleting the climate transition plan implementation, the EU is weakening the key legislative frameworks for businesses to prepare for climate risks and global challenges that can severely affect their operations and value chains,” said Julia Otten, who works on corporate due diligence at Frank Bold, a sustainability NGO and law firm.
“This is counter-productive for businesses, weakens accountability, and jeopardises the EU’s own plans and objectives on climate and the industrial transition,” she added.
“Extremely disappointing”
Industry leaders in clean energy technologies say that the changes undermine their sector’s climate efforts and risk putting companies that prioritise sustainability at a disadvantage.
Rachel Owens, CEO of the Solar Stewardship Initiative, a multistakeholder scheme that has set out standards for what transparent and sustainable solar value chains should look like, told Climate Home News the move was “extremely disappointing”.
Requiring companies to set out their climate transition plans would have demonstrated that the production of solar panels and other renewable energy technologies and the energy they generate have much lower emissions than their fossil fuel alternatives, she said.
For Maurice Loosschilder, global head of sustainability at Signify – a multinational company that manufactures LED lighting systems that help reduce energy consumption – the removal of the climate transition plans from the law will make it more difficult to align businesses and their supply chains with the EU’s climate goals and could reduce incentives for innovation.
Because of its large size, Signify still falls under the law’s requirement. But Loosschilder said he was concerned that the company could lose its competitive edge when faced with small companies for which the same sustainability rules do not apply.
Intense lobbying
The agreement reached on Tuesday followed intense lobbying by industry and governments.
In a letter addressed to EU leaders, the US and Qatar warned that investment and energy supplies to the EU would be harmed if the CSDDD came into effect in its original form.
Documents obtained by the Amsterdam-based Centre for Research on Multinational Corporations (Somo) show how 10 major companies lobbied to dilute the regulation. This included oil and gas majors ExxonMobil, Chevron and TotalEnergies as well as metals and minerals producer Nyrstar, a subsidiary of commodity trading giant Trafigura Group.
Total Energies defended its advocacy in Brussels and in European capitals as being “in full compliance with applicable laws and regulations”. The other companies did not respond to Somo’s requests for comment.
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NGO Global Witness accused EU leaders of giving in to lobbying by the fossil fuel industry.
“Major oil and gas giants will now be able to dodge their responsibility to act on [the] climate, largely thanks to intense US political and corporate pressure,” Beate Beller, a senior campaigner at Global Witness, told Climate Home News.
The EU’s about-face also weakens efforts to clean up the supply chains of technologies needed for the energy transition such as electric vehicles, batteries and solar panels.
“Clean tech cannot be ‘clean’ if the raw materials behind it are mined under weakened standards. This is what made the spirit of the CSDDD so promising: it paired climate transition plans to cut fossil-fuel dependence with robust human-rights and environmental due diligence across clean-tech supply chains,” she added.
Lower bar on supply chain oversight
The rules will now only apply to companies established in the EU with at least 5,000 employees and a net global turnover of 1.5 billion euros. It had originally applied to companies with at least 1,000 employees and turnover of 450 million euros. Member states have until July 2028 to transpose the requirements into national law.
When assessing their supply chains, companies will need to follow a risk-based approach and focus on areas that carry the biggest potential for harm. For example, an EV maker might focus on the production of the battery, which requires a range of different minerals whose extraction and processing carry high risks.
However, companies are no longer required to carry out comprehensive mapping of their direct and indirect suppliers. Instead, they will need to conduct “a general scoping exercise” based on “reasonably available information”.
Johannes Blankenbach, a senior researcher at the Business and Human Rights Centre, told Climate Home News that it is important that companies identify risks beyond their direct suppliers.
That’s because the most severe risks typically lie further up the supply chain, for example, where raw materials are sourced or extracted from the ground, he said.
In addition, harmonised rules across the EU to allow victims of harms to take companies to court have been removed, which will make it more difficult for communities to find legal remedies, Blankenbach added.
While the EU Commission said the less onerous requirements should help drive investment, Sonia Dunlop, CEO of the Global Solar Council, a trade body for the solar industry, said investors in solar farms wanted guarantees about the origin of solar panels and battery storage equipment.
“They want to know where it was made, and they want to know that it was properly made according to the highest environmental, social and governance standards,” she said, citing industry initiatives to boost supply chain transparency and standards such as the Solar Stewardship Initiative.
She said the initiative had been spurred by both the EU’s plan to tighten due diligence laws as well as industry concerns over the use of forced labour in the production of polysilicon used in solar panels in China’s Xinjiang region.
The post EU weakening of corporate sustainability rules ‘jeopardises’ climate action, critics say appeared first on Climate Home News.
EU weakening of corporate sustainability rules ‘jeopardises’ climate action, critics say
In recent years, the monsoon season in Pakistan has taken a new and dangerous turn.
July and August typically bring high levels of rainfall across the country, and while flooding isn’t uncommon, the extent and severity could be readily predicted.
These patterns have now changed. In 2022, extreme rainfall swept Pakistan and huge swathes of the country were under water. Sindh province experienced levels of rain 508% above average for the time of year.
Extreme weather in Pakistan is becoming the norm. The past 15 years have brought widespread flooding, loss of life and billions in financial costs. A post-disaster report, produced by the Pakistan Government, stated that the 2022 floods were “a wake-up call for systemic changes to address the underlying vulnerabilities to natural hazards”, citing the country’s lack of climate-resilient infrastructure.
But heavy rainfall is only one of the water-related issues that Pakistan faces. In a country with huge geographical diversity, from sweltering deserts to freezing mountain tops, the water stresses are equally as varied. In many regions the key concern is a lack of reliable, clean water that can be used to grow crops and feed families.
We must invest in early warning systems to tackle crises like Kenya’s drought
The risks of the Indus
The Indus River plays a critical role in Pakistan. This major artery travels almost the entire length of the country, an estimated 2,000 km, from the Himalayas to the Arabian Sea. It is a crucial economic lever, supporting nearly 90% of Pakistan’s food production and 25% of its overall GDP. What happens to this river – both human and natural impacts – has huge consequences for the rest of the country.
The government and civil society agree that urgent action is required to protect Pakistan’s fragile water resources. A new adaptation project – SAFER Pakistan – is seeking to address these concerns with solutions that can be used to solve similar climate-related issues elsewhere.
The US$ 10 million project is led by ICIMOD, an intergovernmental research centre, alongside UNICEF, and financed by the Adaptation Fund. The intention is to tackle six key issues that people face in the Indus Basin: cryosphere risks, drying springs, groundwater, pollution, unsustainable water use, and community resilience.
In practice this means exploring different solutions that put communities in control of their own adaptive capacity. One solution under development is the use of community early warning systems.
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A warning sign
According to researchers, early warning systems “aim to empower affected communities against hazards and help them to sufficiently prepare before disasters strike.”
The northern provinces of Pakistan – Gilgit-Baltistan and Khyber Pakhtunkhwa – are the main focus for testing these systems. In this mountainous region the Indus is fed by thousands of glaciers which sustain water flow during the dry season. At the same time, increased temperatures and unpredictable weather patterns are changing how these glaciers behave, leading to avalanches, increased snowmelt, and landslides.
As glaciers start to melt due to climate change, they can form large lakes high up on the mountain that can pose a serious threat to the communities living below. When these natural dams fail, huge quantities of water come careening down the mountain, a phenomenon called glacial lake outburst flood.
The SAFER project is exploring how to use local knowledge and observations of the mountain to ensure people know how and when to evacuate when these outbursts occur. This human intelligence will be combined with data from remote sensors to save lives and livelihoods. In total, over 435,000 people will be impacted by the project.
“Early warning systems often serve as the backbone of a multi-faceted response to reduce climate disaster risk,” commented Mikko Ollikainen, head of the Adaptation Fund. “But local information is often just as valuable as the real-time data you receive from sensors or satellites,” he added.
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Shaping an effective response
Community early warning systems – together with other preventive adaptation measures – are proving a popular solution to extreme weather events.
A separate adaptation project in the mountains of Central Asia is grappling with the same problem of glacial flooding. In this case, with US$6.5 million in funding from the Adaptation Fund, UNESCO has been implementing early warning systems across Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan for the past five years, with considerable success.
Diana Aripkhanova, a project officer at UNESCO, and based in Kazakhstan, told Climate Home that glacier lake outburst floods “represent an increasing climate-related hazard across the high mountain regions of Central Asia”.
“These events can trigger destructive floods and debris flows that affect downstream communities, infrastructure, and livelihoods,” she added.
The project utilises real-time data drawn from weather monitoring stations with community preparedness to shape a fast and effective response to life-threatening flooding. This includes training people on evacuation routes, safe locations and simulation drills. In addition, the project has tried preventative measures such as planting hundreds of trees in valleys prone to landslides to provide greater stabilisation.
In total, four early warning systems have been installed across the four countries involved in the project covering seven high-risk areas. As a result, UNESCO estimates these systems are protecting over 100,000 people.
“Early warning systems are a key risk reduction measure, allowing communities to evacuate in time and reduce potential loss of life and damage to assets,” added Aripkhanova.
Community participation
The active role of each community is built into these interventions. Ensuring local people are core contributors is seen as crucial to building long-term climate resilience.
These communities are witnessing the threats from climate change materialise on a yearly basis, and researchers are now tapping into that understanding when implementing adaptation projects.
After the 2022 floods, Pakistan’s development minister, Ahsan Iqbal, wrote that “there is an opportunity to do things differently” and that “enhancing Pakistan’s resilience to shocks and stresses amidst climate change, especially for the poorest…is essential for the country’s future.”
The climate shocks remain as strong as ever, but using the right tools and simple solutions can soften the blow when they occur.
Adam Wentworth is a freelancer writer based in Brighton, UK
The post Early warning systems are saving lives in Central Asia appeared first on Climate Home News.
From the Amazon to the Mekong, migratory freshwater fish underpin food security for millions, but over 300 species need urgent conservation intervention, warns a new UN report.
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