On 31st January 2022, the Climate Disclosure Standards Board (CDSB) was consolidated into the IFRS Foundation to support the work of the newly established International Sustainability Standards Board (ISSB). While this site and its resources remain relevant for preparers looking to improve sustainability disclosure until such time as the ISSB issues its IFRS Sustainability Disclosure Standards on such topics, no further work or guidance will be produced or published by CDSB. For further information please visit the IFRS website.

Progress on the road to a European Climate Law

The plenary session of the European Parliament has confirmed this week that it is willing to support an ambitious 60% emission reduction target for 2030 as part of the European Climate Law. The decision was made by a narrow margin in European Parliament and negotiations with the Member States will now take place. What does this mean for the EU’s climate ambitions?

The European Climate Law is one of the flagship initiatives of the European Green Deal and an instrumental tool to make the 2050 carbon neutrality objective a reality. This is a historic move as the European Union would become the first jurisdiction to put such ambition into law. This echoes a recent announcement from China on reaching carbon neutrality by 2060. While the ability of the United States to commit to similar objectives remains conditioned to the results of the upcoming presidential elections.

To reach this 2050 objective, ambitious targets are needed for 2030. These targets are what the European institutions will have to agree in the upcoming trialogue negotiations.

At this stage, each of the European institutions position along the following lines :

  • The European Commission through the voice of its president Ursula Von der Leyen in her State of the Union speech has announced its intention to support an emissions reduction target of at least 55% below 1990 levels by 2030. This is a substantial increase compared to the previous target of at least 40%.
  • With the recent vote in the plenary session, the European Parliament has come out with the highest level of ambition and a 60% emission reduction target for 2030.
  • The Council which is led by the German Presidency until the end of the year (Portugal is next to hold the rotating presidency) is still negotiating its position, with some countries like Finland announcing their commitment to support a 60% emission reduction target.

Both the narrow majority in the European Parliament and the long discussions between Member States show that there is still a long way to go before such law is adopted along the ambitious targets the climate emergency requires. Such disagreements are additional proof that although all parties may be convinced of the need to transition towards a low carbon economy, there are remaining questions about the pace of such transition.  Discussions are ongoing between those willing to accelerate change, those content with the status quo, and indeed those pushing for a slow down due to the current Covid crisis, despite some experts pointing out that current human behaviours are a clear contributing factor to the current pandemic.   

Only time will tell if the European Union manages to agree on an ambitious pathway towards carbon neutrality, which will require an agreement between the institutions but also further discussions to convince the private sector of the need to transition quickly despite short term costs.  

CDSB will continue to engage with both the institutions and corporates to contribute to timely and ambitious climate policies.

  • Following our review of 2019 non-financial information under the Non-Financial Reporting Directive (NFRD), we will soon publish a review of 2020 reports. You can sign up to the NFRD briefings and book your virtual seat for the upcoming review launch here
  • We have also contributed to the recent European Commission’s public consultation on sustainable corporate governance and emphasized that Directors' duties and the role of boards with respect to environmental and climate risks and opportunities should be strengthened to end the short-term focus of businesses and adjust for timeframes realistic for achieving the European Green Deal.

If you have questions about this article, please get in touch with CDSB's Policy Manager, Axelle Blanchard at .


With the contribution of the LIFE Programme of the European Union

The content of this page is the sole responsibility of the author and can under no circumstances be regarded as reflecting the position of the European Union