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Executive summary │ ESG Series: The EU Competitiveness Compass
Unlocking innovation, regulatory simplification, industrial decarbonisation
The EU Competitiveness Compass - innovation, decarbonisation and simplification
Omnibus, Clean Industrial Deal and assessing the implication for corporates
Executive summary
Navigating the energy trilemma of affordability, security and sustainability amidst today’s rapidly evolving geopolitical landscape, continues to weigh on the energy transition across the European continent.
Whilst corporates have retained long-term net zero commitments, a plethora of drivers are cited for the green investment delays being witnessed from (1) policy uncertainty, (2) elevated interest rates; (3) a slower than expected scaling of climate technologies, (3) infrastructure bottlenecks, (4) more focus on defence and industrial competitiveness when balanced against decarbonisation targets and limited fiscal headroom, (5) heightened attention on cash flow, and (6) the perception of better risk-adjusted returns elsewhere.
In an effort to galvanise these pushbacks, the European Commission unveiled the “Competitiveness Compass” – the new economic doctrine – bringing to life the pillars of Mario Draghi’s “future of European competitiveness” report of, (1) closing the innovation gap, (2) decarbonisation, and (3) increasing security.
In this thought leadership report, we offer our clients how the Competitiveness Compass may reinvigorate the green agenda with a special segment covering sustainable finance:
- Omnibus package. First measure in advancing regulatory simplification of the CSRD, CSDDD, Taxonomy, CBAM and European investment programmes – we view changes as extensive but mostly anticipated.
- Clean Industrial Deal. A business plan focusing on six dimensions surrounding energy intensive industries and clean tech – we view the emphasis on “making decarbonisation profitable” as significant.
- Corporate implications. Simplification with a view to boosting competitiveness raises fundamental questions as to whether necessary transition is sustainable – we examine both benefits and risk.
