Welcome to the EU Monthly, NEO’s sustainability and ESG news round up from Brussels.
Here are the highlights for May 2024:
- “Fit for 55” progress: The Council of the European Union has approved new regulations to significantly cut methane emissions in the energy sector as part of the “Fit for 55” package aimed at achieving climate neutrality by 2050. The new rules mandate comprehensive monitoring and reporting of methane emissions, regular surveys of infrastructure for leaks, and prompt repairs of leaks above certain thresholds. Additionally, venting and flaring of methane will be largely banned by 2025 and 2027, respectively. The regulations also extend to monitoring methane emissions from energy imports starting in 2027 to enhance transparency and global accountability. The European Commission will review the effectiveness of these measures in 2028. (Read more: Euronews)
- CSRD, updates: On May 24, 2024, the Council of the European Union gave the final approval for the Corporate Sustainability Due Diligence Directive. This directive mandates that large companies with over 1,000 employees and a turnover exceeding €450 million implement measures to identify, prevent, and mitigate potential adverse impacts on human rights and the environment resulting from their operations and supply chains. The directive also requires companies to establish climate transition plans aligned with the Paris Agreement. Member states will have two years to incorporate these rules into national law. (Read more: Council of the EU website)
- Measures against greenwashing: The European Securities and Markets Authority (ESMA) has introduced new guidelines for investment funds using ESG or sustainability-related terms in their names to avoid greenwashing. These guidelines mandate that 80% of investments at minimum must meet sustainability criteria for funds labeled as “sustainable.” Additionally, a transition category for investments on a positive environmental trajectory has been established. These measures respond to increasing investor demand for ESG funds and aim to ensure transparency and integrity in fund naming practices, as well as to protect the consumer. (Read more: ESG Today)