MEPs have agreed to strengthen the EU’s new corporate sustainability law in a key vote in the European Parliament’s environment committee to bolster proposed new sustainability rules for business.
The agreed changes to the draft law would mean that large EU companies will have to check their global value chains to prevent contributing to runaway climate change, oil spills and pollution, and includes climate mitigation and adaptation in the scope of companies’ obligations. Carbon transition plans for companies must now be time-bound and include science-based targets, minimising the risk of further greenwashing.
Welcoming the vote Garry Walsh, Policy and Advocacy Advisor with Trócaire, said while this law is far from perfect, with loopholes that still need to be addressed, the vote takes us one step closer to turning the tide on corporate contributions to climate breakdown.
He said: “MEPs are trying to rescue a draft law which is weak and could actually make things worse by encouraging greenwashing. While the draft law asks companies to produce a climate transition plan in line with the Paris agreement, it fails to meaningfully enforce those plans, or require companies to actually check how they may be causing or contributing to climate impacts across the world. So the risk is that companies can claim eco-credentials and say they are making the transition to a carbon-neutral future, while not actually doing anything meaningful in practice.”
Garry Walsh said this step is significant in beefing up this legislation and giving it real potential to combat climate breakdown.
“To address this urgent planetary crisis, what we need are strong new rules for big polluters and no more corporate greenwash. The communities Trócaire works with around the world who are already experiencing severe climate impacts simply don’t have years to wait if we introduce weak laws that don’t effectively change corporate behaviour.” he added.
However, he said some loopholes still remain to be addressed in the draft law. The committee left “scope 3” emissions (indirect emissions that are not produced by the company itself, but by the customers using the company’s products or suppliers making products that the company uses) at the discretion of each company. This would mean that some of the most harmful business impacts could be excluded from the law, for instance huge oil companies would not be held accountable for the emissions that come from how their oil is used.
Furthermore, the law has yet to be finalised with further potential for the law to be watered down as it progresses through the EU institutions.
“It was really positive to see Irish MEPs supporting this important vote in the environment committee. As this draft law now progresses further through the European Parliament, it is essential that Irish MEPs stand up to support strengthening it. Four our of five Irish people want to see a strong law to rein in corporate damage to the environment and to human rights, and our elected representatives need to act on that call.”
“It’s been three years since the European Union vowed to become a climate neutral economy by 2050. This is a goal that will be impossible to reach without significant action from the corporate world, given that just 100 companies, including the largest oil, coal and gas firms, have been the source of more than 70 per cent of the world’s greenhouse gas emissions since 1988.”
While there’s been a huge increase recently in corporate climate pledges , the significant work that is needed to achieve these commitments isn’t being done by many corporations. In a study of the 1,000 largest companies operating in the EU, only 23 per cent of them had strategies to address climate risks.