Green Practices Expected to Impact the Future of European Businesses
There is still a long way to go until full implementation, but each proposal has a potential impact on businesses in the region.
The implementation of greener policies in the euro zone is designed to impact the global climate, but is also expected to have an effect on businesses in the region.
The European Union announced a slew of climate change draft proposals last summer that are aimed at phasing out fossil fuels. While it's only been a few months since their announcement, and there is still a long way to go until full implementation, each of them has a potential impact on businesses in the region. One plan involves taxing jet fuel and another would effectively ban the sale of petrol- or diesel-powered cars over the next 20 years.
Climate Action Network Europe, which represents more than 1,500 NGOs and 47 million citizens, has called for fundamental reform of the EU's fiscal rules "to ensure that any additional fiscal space will translate into targeted and effective climate action by Member States," as well.
A swath of citizens and governmental officials are keenly looking at what can be done to preserve the climate. Business owners may be in favor of climate-preserving initiatives, too, while also wary about what they mean for their bottom line. Not only could the policies' content cause financial issues for businesses, they could be costly to pass, as well, even with debt breaks. Austrian Finance Minister Magnus Brunner told CNBC last month he wouldn't immediately say "yes" to a proposal that would approve a debt break for green investments "because debts are debts."
EU rules meant to keep budget deficits below 3 percent of GDP were suspended during the coronavirus pandemic to give the 19 euro nations more financial freedom to spend money and offer citizen support, but will be reinstated next year. In addition to the impending regulations on climate, those rules will be reinstated at a time of high inflation and during a period of change for the economy, especially as gig workers get more rights.
While dealing with all of these changes, Europe has pledged to reduce greenhouse gas emissions by at least 55 percent over the next eight years. These changes are coming, and business owners should pay close attention to all governmental actions and consider any pending or approved changes when budgeting and configuring their own bottom lines.