24. 04. 2023

Sustainability becomes a Regulatory Requirement for Companies: EU Increases Pressure on Industries with a Uniform Climate Law

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It has been decades since we had first been warned by scientists about the rising carbon emissions and its potentially dangerous effects. After its initial announcement to the world, global warming quickly became the center of interest. On the contrary, many were skeptical and considered the claims exaggerated; and stayed reluctant to take precautionary actions. This naturally resulted in delays in taking the vital steps towards sustainability and emission reduction protocols.

In the light of many events and assuring evidences, sustainability nowadays has become a mega trend and we witness almost unanimous support from the countries around the world. The level of devotion among the different countries’ parliaments is naturally divergent and countries’ diverse contribution to the sustainability efforts result in ineffective struggles with the rising carbon emissions. However, recent unification efforts of countries towards climate change are encouraging and many countries have started to follow joint sustainability protocols.

The European Green Deal and Paris Agreement

The Paris Agreement is the first true effort for reducing the carbon emissions worldwide. It was signed by 194 countries on December 12th 2015 at the UN Climate Chance Conference (COP21). The agreement is a legally binding international treaty that entered into force on November 4th 2016. It represents the first international agreement that entered into force in less than a year after it was signed.

With the Paris agreement, it is aimed to keep the global warming levels under 2C compared to pre-industrialization period. In fact, keeping the global temperature increase around 1,5C holds vital importance. The results are collected and reviewed every 5 years for each contributing party, and consistent reduction in emissions is expected.

Governments around the world have started to intervene by precautionary and relieving measures to withstand the increasing CO2 emissions. In fact, for the first time in history, in line with the Paris Agreement, the EU announced a uniform climate law, known as the European Green Deal.

The European Green Deal necessitates a challenging 50% reduction in carbon emissions by 2030, known as the 2030 agenda. The 2030 agenda is the first true barrier to overcome to achieve a carbon-neutral society in 2050. The European countries are expected to achieve net-zero carbon by 2050 and this scenario will only be realistic if the 2030 expectations are fulfilled. This reveals the importance of the 2030 agenda and many organizations have already started to take ambitious actions towards their sustainability achievements.


Effected Industries and the Possible Regulatory Outcomes

It would not be an exaggerated claim to state that the European Green Deal or The Paris Agreement affect all industries. However, not all industries are equally affected; some are affected more dramatically simply due to the nature of the industries. These industries require significantly more efforts to overcome the challenges that come along with the sustainability transformation efforts that they are required to make. This is where we need to address the possible actions that the European Court of Justice may take in case of any failure for a country or organization to comply with the agreements.

The Court of Justice of the European Union is the responsible authority to inspect the compliance of the countries, and any failure to follow the European Green Deal may result in an infringement action where the countries are required to present the information about the current status of the environmental standards. Failing to comply with the EU Law may result in fines depending on the country’s GDP (Gross Domestic Product) and solvency, as well as the level and the duration of the breach. The main purpose of the regulatory actions taken by the European Court of Justice is to make an example and encourage other countries to strengthen their environmental standards.

Adastra’s analytics solutions can facilitate your decarbonization efforts and bring you the opportunity to modernize your organization. Through modernization, it is easier for companies to follow the steps of the 2030 agenda, and eventually be a carbon-neutral company in 2050. Aforementioned risks are eliminated by simply strengthening environmental standards and providing reports of auditable as well as scientifically-backed carbon emission levels to the authorities of the European Union. Get in touch with Adastra and find out how our experts can contribute to your sustainability journey.

Why Adastra?

As a global consultancy company, we can support you to run your 2030 agenda. You can rely on our experts to efficiently implement sustainability data analytics and start collecting, measuring and calculating carbon footprint of your organization. Start to improve ESG compliance and enhance your sustainability performance. Thanks to our vast experience in data engineering, you will smoothly discover the key areas of improvement.

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