ESG Ahead Brief
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BLOG Story
Author: Veini Simolin
Title: ESG and sustainability expert
Blog: Sustainability Weekly in LinkedIn
Hello everyone! This week I have been travelling a lot, but the progress of sustainability never ceases. Proud to say that I have been to 5 countries in the past 5 days, all without flying! I only have 4 stories for you this week, but they are all interesting. And if you’re a sustainability professional now is the time to make a difference! 🚞🚢
🇪🇺 First bit of news is that the EU commission has opened a consultation on the development of guidance on the corporate sustainability due diligence directive (CSDDD). It is very important that the users of standards should participate in their development. By participating you make sure that all the relevant questions get answered, and that your voice is heard in the rooms where decisions are made. Below is the post from Andreas Rasche giving all the relevant details!
“The Commission has opened the consultation on the development of the #CSDDD guidelines – an opportunity to shape due diligence in the EU. The consultation seeks input on many issues such as risk identification and prioritisation, stakeholder engagement, remediation, and contractual clauses. At this stage, the Commission is asking for feedback via a comprehensive questionnaire. The Guidelines themselves are planned for Q1/2027. 👉 Guidelines matter! They clarify obligations/expectations and thereby reduce uncertainty and costs… === Access it here (until 24 July): https://lnkd.in/ek67KSyg”
🏭 This article comes from ESG Today, and it is an interesting one. In short it is about three of Europe’s largest steelmakers, ArcelorMittal Europe, thyssenkrupp Steel, and voestalpine publishing an open letter to the EU legislators on the effect that they estimate that the new EU emission trading system will have on the EU steel industry. Basically, they are warning, that the steel industry will become uncompetitive if the new rules start applying as they are.
Firstly, what is an emissions trading system? Basically, an ETS (emissions trading system) is a marketplace that allows companies that for some reason can’t reduce their emissions to purchase so called carbon credits from companies that reduce emissions. So, say a company is making biofuel and in the process, they end up reducing carbon in the atmosphere. Through the emission trading system, a company that produces emissions can “offset” their own emissions by buying credits from the biofuel producer. The prices and targets are set by the legislators, and this is what the open letter is trying to address
It might be strange to hear this from a sustainability professional, but I believe that this open letter should not be taken lightly by the EU. Sustainability regulation and progress needs to be realistic and also economically sustainable. The systemic undermining of the EU stell industry should not be an effect of aur green legislation, especially since all of the companies that participated in the open letter have a clear decarbonisation pathway. If requirements are not designed with realistic goals, we can end up running into a couple of challenges. Firstly of course unattainable goals are demotivating, reducing the will of the companies to follow through on their goals. Additionally building up resentment and animosity between businesses and regulations will cause the businesses to attempt to lobby against the legislation and create pushback. Working towards environmental goals is important but we can’t reach goals without co-operation. Now we see what the EU will do next, will they double down or negotiate?
(https://www.esgtoday.com/eu-steel-giants-warn-rising-ets-costs-risk-destroying-industrial-base/)
📈 It’s always nice to get positive news from the world of investing. This week’s glimmer of positivity is brought to us by private equity and venture capital investor EQT Group, who have announced the establishing of a new $4.4 billion sustainability-linked loan (SLL), with interest rates tied to the performance of portfolio companies in its Asia Pacific-focused private equity fund, BPEA IX, towards material company-specific sustainability targets.
I like this format of creating loans with interest rates tied to company specific targets instead of generic sustainability goals. This allows companies to truly act on material issues, and the impact driven by this type of incentive will be greater, because typically companies have their biggest sustainability impacts linked to some company specific metric or activity. Read the whole ESG today article below for more detail.
📝 I enjoy highlighting articles written by other creators here and now I have the chance to do that once more. This article by Julian Meitanis has also a thematic overlap with the first post I highlighted in this article, because it is also about a new public consultation that should be of interest to all sustainability professionals. This one is about the consultation opened ISO regarding their ISO 14060 standard, the world’s first independently verifiable international standard for net-zero aligned organizations.
So, give Julians article a read and go participate in the consultation!