The Council Presidency Trio Commits to More Sustainability

Enterprises should prepare for increased ‑ also regulatory ‑ measures to promote a sustainable economy and the announced transition to a green economy.

In our newsletter "Corona vs. Does the Virus also Stop Sustainability?" we concluded at the beginning of April 2020: The coronavirus crisis will not stop sustainability, on the contrary, it may even promote it. The new decade would thus continue to be in the spotlight of sustainability (see our previous newsletter on that "Outlook Corporate Social Responsibility 2020: More Sustainability, More Acts, More Risk" of February 2020). The current developments since then further point in this direction. So it remains the same: A diligent and anticipatory CEO will be well advised to keep the issue of sustainability in view. In detail:

18-month Programme of the Future Council Presidency Trio is Set

The General Affairs Council, which prepares and follows up on the European Council meetings, dealt with the programme of the future German, Portuguese and Slovenian Presidencies on 16 June 2020. The three countries had agreed on cooperating closely in their presidencies of the Council of the EU. The Cabinet of Germany had approved the draft programme already on 3 June 2020.

It came as no surprise that the final agenda of the 18-month programme (or Trio Programme for short) was strongly influenced by the coronavirus crisis and its management. Nevertheless, or perhaps precisely for this reason, the Trio Programme continues to be based on the main priorities of the strategic agenda 2019-2024 agreed by the Heads of State and Government of the EU last year:

protecting citizens and freedoms
developing a strong and vibrant economic base
building a climate-neutral, green, fair and social Europe
promoting European interests and values on the global stage

The Trio Programme is now expected to be endorsed by the European Council by written procedure by the end of this week.

Already the introduction shows clearly that (also) the trio of presidencies continues to give top priority to the goal of sustainable and inclusive growth and a green economy. This is what it says about overcoming the coronavirus crisis and restoring the economies of Europe:

" ...a lot more remains to be done, in particular as regards controlling the pandemic and getting Europe’s societies and economies back to full functionality by fostering sustainable and inclusive growth, integrating inter alia the green transition and the digital transformation, and by drawing all lessons from the crisis and tackling its socio-economic consequences. To this end, as an overarching priority, the three Presidencies are determined to implement all appropriate measures serving a robust recovery of the European economy, in line with a sustainable and inclusive growth strategy, that takes account of the goal to achieve climate-neutrality by 2050 and addresses the significant social impacts and human dimensions."

Section IV. of the 18-month Programme on "Building a Climate-Neutral, Green, Fair and Social Europe" lists specific goals: Achieving a climate-neutral EU by 2050, while ensuring that the transition is costeffective, just, socially balanced, fair and achieved in a way that preserves the EU's competitiveness, as well as the protection and sustainable use of biodiversity and natural resources are called "key elements in the green transition". This is framed by the commitment to implement the 2030 Agenda for Sustainable Development and the 17 Sustainable Development Goals (SDGs) enshrined therein. In addition, the following paragraph in particular stands out, which clearly aims in the direction of an EU-wide supply chain law (see also our blog post "Cross-sector supply chain due diligence obligations underway").). It also announces an EU action plan for responsible corporate conduct:

"The three Presidencies will drive forward efforts to achieve an EU-wide coherent implementation of the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises and the ILO's Tripartite Declaration of Principles on Multinational Enterprises and Social Policy. They call for the development of a new communication on “Corporate Social Responsibility (CSR)” including an EU action plan on responsible business conduct and taking into account experience and lessons from the COVID-19 crisis."

The coronavirus crisis has highlighted the vulnerability of a globalised world at its most sensitive spots, thus highlighting the importance of strengthening the resilience of companies with regard to possible future crises. The consideration of climate change and climate protection is a prominent example of this (see also our newsletters above).

German Chancellor Angela Merkel: "Investing in sustainable development"

In her Video message to the Annual Conference of the German Council for Sustainable Development (RNE) on 15 June 2020, German Chancellor Angela Merkel emphasised that in dealing with the coronavirus crisis it was important to "bring together short-term crisis management and long-term future planning". The Federal Government's comprehensive economic stimulus package served these goals.

On the one hand, the Federal Government is concerned with "strengthening the resilience of the economy and society to pandemics, climate change and other major challenges". On the other hand, it aims "to achieve a sustainable economy and lifestyle in our country".

The 2030 Agenda with its Global Sustainability Targets was the compass "to set the course for sustainability in the future".

Speaking at the opening of the conference, Werner Schnappauf, Chairman of the German Council for Sustainable Development, said that sustainability should become the guiding principle for the future, "not only for words but also for actions."

With regard to the issue of the environment and human rights in the supply chain, RNE had already recommended in mid-May that Germany should play a "pioneering role in supply chain legislation in Europe". In its Statement on "Sustainable Supply Chains" it advocates, among other things, "anchoring the perception of care for social and ecological aspects in globally networked supply chains and business relationships by means of a smart mix". This smart mix should consist of "legal requirements and binding framework conditions, the description of minimum requirements and voluntary initiatives by industry and civil society".

Outlook

On 18 June 2020, the Chancellor will make a government declaration to the German Bundestag on the European Council and the German presidency of the Council.

The press is currently reporting on a still confidential draft work programme for the German presidency of the Council of the EU from 1 July 2020. This is to be a 24-page paper. This German work programme is obviously not identical with the above-mentioned Trio Programme and therefore remains to be seen.

In addition, an update of the German sustainability strategy is pending. The draft of the German sustainability strategy 2020/2021 is expected to be published for comment after mid-September 2020. The RNE presented initial recommendations for the further development of the German sustainability strategy 2020/2021 in its Statement on "Ambitiously opening the Decade of Sustainability" in May 2020.

Dr. André Depping

Dr. Matthias Etzel

Dr. Daniel Walden