EU Commission presents proposal for post-COVID-19 Recovery Plan, includes initiative on sustainable corporate governance in 2021

On 27 May 2020, the EU Commission presented its proposal for a post-pandemic recovery plan 'Next Generation EU' to help the bloc recover from the COVID-19 (coronavirus) crisis. The EU’s updated seven-year €1 trillion budget proposal and €750 billion recovery plan's aim is to "guide and build a more sustainable, resilient and fairer Europe".

The proposal also includes a new initiative in 2021 on sustainable corporate governance, to "ensure environmental and social interests are fully embedded into business strategies". Civil society says this must include robust due diligence obligations for EU companies to respect human rights and the environment. It follows an announcement by EU Justice Commissioner Reynders last month committing to introducing rules for mandatory corporate environmental and human rights due diligence.

More information is available below, including reactions from civil society.

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Article
27 May 2020

'Do no harm': EU recovery fund has green strings attached

Author: Frédéric Simon | EURACTIV.com

The European Union’s proposed €750 billion fund to help the bloc recover from the coronavirus crisis will have green strings attached, with 25% of all funding set aside for climate action, the European Commission has said...

Spending will also be guided by a sustainable finance taxonomy, which aims to channel private investments into technologies that contribute to at least one of six pre-defined environmental objectives, such as climate change mitigation.

And a “do no harm” test embedded in the taxonomy will in principle exclude fossil fuels and nuclear power, which are seen to be undermining other environmental objectives such as pollution prevention and control...

Environmentalists expressed mixed feelings about the recovery plan, with reactions ranging from enthusiasm to ... scepticism...

Climate think-tank E3G was also broadly positive although it ... warned ... that the 25% climate quota in the EU budget “is too low given the scale of the challenge”...

Even though the plan includes ... green programmes.., it does not end existing support for gas, oil, coal, and industrial farming, Greenpeace said...

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Article
27 May 2020

EU Recovery Package: "repair & prepare" not yet fully green and fair

Author: WWF

The EU Recovery Package presented by the European Commission today has reconfirmed its ambition to achieve the European Green Deal, but many key elements including the role of nature are still missing, and backdoors seem to be left open for unsustainable investments to continue. The package consists of a revised EU budget (MFF) proposal that includes additional recovery funds, with an overall value of 1.85 trillion EUR...

“In particular, we are missing clear mechanisms for implementing and enforcing the green conditions to truly ensure that no money spent by Member States will go to harmful activities such as fossil fuels..."

Since the beginning of the crisis, WWF has stated unequivocally that a truly green recovery must not support activities that are harmful to the environment; ...and that it should use the EU Taxonomy to identify the activities that should be supported...

- [T]he ‘do no harm’ principle ... seems to apply only to public investments in the recovery,  and not the 1.1 trillion EUR of the EU budget, thus leaving the door open to EU financing of polluting sectors...

- The Commission commits to use the taxonomy to guide investments in the EU’s recovery, but only for the recovery funds, not for the MFF. This leaves big questions on how exactly the taxonomy will be applied to MFF expenditure and requires urgent clarification...

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Article
27 May 2020

Europe's moment: Repair and prepare for the next generation

Author: European Commission

Today, the European Commission has put forward its proposal for a major recovery plan. To ensure the recovery is sustainable, even, inclusive and fair for all Member States, the European Commission is proposing to create a new recovery instrument, Next Generation EU,embedded within a powerful, modern and revamped long-term EU budget...

[T]he European Commission is proposing to harness the full potential of the EU budget. Next Generation EU of €750 billion as well as targeted reinforcements to the long-term EU budget for 2021-2027 will bring the total financial firepower of the EU budget to €1.85 trillion...

Relaunching the economy does not mean going back to the status quo before the crisis, but bouncing forward. We must repair the short-term damage from the crisis in a way that also invests in our long-term future...

The European Green Deal as the EU's recovery strategy: ...

Rolling out renewable energy projects...

Strengthening the Just Transition Fund...

A fair and inclusive recovery for all: ...

Fair minimum wages and binding pay transparency measureswill help vulnerable workers, particularly women...

The recovery must unequivocally be based on fundamental rights and full respect of the rule of law...

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Article
27 May 2020

Recovery Plan Communication: "Europe's moment: Repair and Prepare for the Next Generation"

Author: European Commission

[T]he EU’s recovery plan must guide and build a more sustainable, resilient and fairer Europe for the next generation...

4. REPAIR AND PREPARE THE NEXT GENERATION: THE POLICY FUNDAMENTALS ...

4.1. The European Green Deal: the EU’s growth strategy...

To help unlock the private investment needed, long-term certainty and predictability are essential. This underlines the importance of the Climate Law and the upcoming proposals for more ambitious emissions reduction targets for 2030. The EU sustainable finance taxonomy will guide investment in Europe’s recovery to ensure they are in line with our long-term ambitions. This will be supported with a Renewed Sustainable Finance Strategy later this year. To ensure environmental and social interests are fully embedded into business strategies, the Commission will put forward a new initiative in 2021 on sustainable corporate governance.

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