Article
January 23, 2025
By Jane Gimber
As world leaders converge at Davos this week, Europe stands at a critical crossroads in its own sustainability trajectory. European Commission President Ursula von der Leyen’s Special Address on Tuesday underscored the challenges facing a world in which major economies are ‘vying for access to raw materials, new technologies and global trade routes’. For Europe, this race is particularly acute due to a lack of access to the domestic resources needed to develop decarbonisation technologies.
The bloc’s strategy of leading by example and exporting its philosophy through regulation are being challenged by the uncertainty of a new Trump administration and ongoing tensions with China. Europe is also recognizing the challenges associated with its Green Deal 1.0 that led to over 160 pieces of legislation being tabled in the last five years.
Many are hopeful that an upcoming ‘omnibus’ package will streamline disclosure requirements. A recent meeting of leaders from Europe’s largest political group went even further and resulted in calls for a two-year moratorium across the EU’s sustainability reporting and due diligence frameworks. The final outcome will be the result of political negotiations over the coming months.
Yet challenges extend beyond corporate reporting. Stringent targets to phase out internal combustion engines by 2035, and mandatory rules to eliminate deforestation practices from supply chains have also faced political backlash.
Navigating these complexities will be critical for the EU to move forward credibly towards its 2030 goals, ahead of a looming 2040 GHG emission reduction target (in the form of -90%) that Commission President von der Leyen has committed to bringing forward.
As the United States pursues an agenda of deregulation, Europe is expected to remain committed to its green ambitions. Yet it will do so with a much greater focus on strengthening the competitiveness of European companies vis-à-vis their international counterparts. In his first few days in office, the newly inaugurated President Trump has pulled out of the Paris agreement, opened the path for LNG export projects and put a halt to offshore wind leasing. For many global companies, the uncertainty stemming from the United States will only be made worse by the widening gap that is being created with other major jurisdictions’ expectations on climate.
With the Forum drawing to a close, one of the most pressing concerns for European leaders at Davos lies in navigating this shifting geopolitical landscape. As von der Leyen noted in her address, ‘in the last 25 years, Europe has relied on the rising tide of global trade to drive its growth’. As the world approaches a period of possible low tide, Europe’s position in the race of clean and disruptive technologies will be key.
See what else is happening
You might also like
-
Expertise
Co-Creation with Influencers is Key to Unlocking Authenticity and Trust in 2025
January 23, 2025
-
Expertise
Trump Brings America-first Economics Back to Davos
January 22, 2025
-
Expertise
Adapting Communication Strategies During Trump 2.0
January 22, 2025
-
Expertise
Productive Constraint: How Japan is Leveraging AI to Overcome Limitations
January 21, 2025
-
ESG
Navigating Conflicting Demands to Advance Climate Action
January 20, 2025
-
Expertise
From Davos Man to Corporate Diplomat
January 17, 2025
-
Expertise
Preparing for Trump 2.0’s First Moves and the New Era in Washington
January 16, 2025
-
Expertise
Corporate Affairs Trends for 2025
December 17, 2024
-
Expertise
2024’s Big Year of Sport: Putting Reputation Risk Management at the Heart of your Sports Sponsorship Communications Plans
December 11, 2024
