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Green requirements from the EU – what you need to know

By 2050, Europe will become the world’s first carbon-neutral continent. A concrete roadmap began to take shape in 2019, when the European Green Deal was reached. The EU has now proposed a large number of updated and new policies under the Green Deal. Here’s how your business will be affected.

“To quote the EU statement: ‘the goal is to create a sustainable economy that is competitive, and a continent that is relevant in the long term’,” says Lukas Hallquist, Innovation and Process Manager at RISE. 

Emanuela Vanacore, researcher at RISE: 

“And that requires strong regulations that create movement at the societal level. There is a need to strengthen and advance what already exists. 

The European Green Deal is a large and complex set of policy measures in the form of regulations and incentives to integrate sustainability into companies’ responsibilities, as well as to provide a fair basis for financial markets. CPR, CS3D, CSRD, CRD, ESPR and UCPD are policies within the EU Green Deal that will contribute to the goal of carbon neutrality in various ways.”  

Domino effect expected when Green Deal is introduced 

The Corporate Sustainability Reporting Directive (CSRD) is a brand-new directive. It has been introduced to make large companies and essentially all listed companies – except the smallest, so-called micro-companies – more transparent about the social and environmental effects of their operations. The directive imposes stricter requirements on and sets standards for sustainability reporting. Operators who do not comply with the new regulations can expect penalties. 

“Since the companies covered by CSRD have a network of subcontractors and customers, we will see a domino effect,” says Vanacore. “When a large company must report in more detail on the impact of their product from supplier to customers and end users, it’s very likely that all operators in their value chain will be affected. The amendments to the regulations will thus trickle down to companies that are not directly covered by CSRD.  

These companies may need to share information in order for their partners in the value chain to report correctly.” 

“If a subcontractor cannot deliver information from their part of the value chain, they become irrelevant as a partner – especially if other suppliers have already done so,” says Hallquist. 

Från och med nu förväntas företag inkorporera hållbarhet i sitt DNA

Time for Swedish companies to familiarise themselves with the proposals 

The new and updated regulations under the European Green Deal are still under development. It is too early to say exactly what effects they will have on the large array of Swedish companies.  

“Although CSRD has been adopted by the EU, it is still up to each member state to implement the directive in national laws,” explains Hallquist. “Different countries may have different approaches to doing this. However, I would advise companies that will need to comply with CSRD to look at the drafts for European Sustainability Reporting Standards included in the directive.”   

“Not all companies are up to date on current regulations, so a good place to start is to determine what applies now and what is expected to apply later,” says Vanacore. “Participate in webinars, read up on the regulations, and contact your partners in the value chain to initiate information sharing and a better communication flow.”  

The report provides and overview of rules and policies 

Lukas Hallquist and Emanuela Vanacore have produced a report that provides an overview of the regulations in the European Green Deal. The report also includes a guide to help companies navigate by mapping out how the rules and policies impact companies specifically, and by finding suitable tools and instruments to achieve compliance.  

“Lukas and I have backgrounds in business model development – we are not lawyers,” says Vanacore. “Our approach when we sit down with the companies is to give them the broad overview, to guide them in understanding what is coming and what is relevant. We can also help companies realise where and when they need the involvement of a lawyer or other specialist. We have a wide range of specialists at RISE, and we have strong links to other research institutes that can also help companies when they need to delve deeper.” 

Companies can also use RISE as a sounding board in their work to reshape their business models, so that these are focused on reducing resource and climate footprints.   

“From now on, companies are expected to incorporate sustainability into their DNA,” says Vanacore. “With the EU’s new regulations, ‘business as usual’ and smaller sustainability initiatives will not work. Companies cannot afford to not make this change.” 

About the European Green Deal 

The European Green Deal comprises a set of policies and initiatives aimed at making Europe the world's first carbon-neutral continent by 2050, by minimising greenhouse gas emissions and increasing the use of renewable energy sources.

EU policies under the EU Green Deal 

Construction Products Regulation (CPR) 
Environmental, functional and safety requirements for new and used construction products. 

Corporate Sustainability Due Diligence Directive (CS3D) 
Obligation for companies to consider negative impacts on human rights and the environment, both up and down the value chain. 

Corporate Sustainability Reporting Directive (CSRD)  
Replaces the previous directive NFRD. Enhanced reporting requirements on sustainability issues for large companies and listed SMEs. 

Consumer Rights Directive (CRD) 
Information requirements for consumers on sustainability guarantees, programme updates, repairability ratings, etc. 

Ecodesign for Sustainable Products Regulation (ESPR)  
Performance or information requirements aimed at making products more environmentally sustainable. 

European Sustainability Reporting Standards (ESRS) 
Reporting standards included in the CSRD.  

Unfair Commercial Practices Directive (UCPD) 
Requirement that traders must not mislead consumers about the environmental or social impact, durability and reparability of products.

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Lukas Hallquist

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Emanuela Vanacore

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Emanuela Vanacore

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