Practical implementation of the EU reporting regulations: Industry perspective
With the Green Deal and ambitions to decouple economic growth from resource use and environmental degradation, the European Union has assumed a leadership positioning in the fight against climate change. One of the key pillars under the Green Deal to drive corporate accountability in this context is the definition of a large body of reporting requirements, with the amount, complexity, and speed of such increasingly exponentially over the last years.
While we at Hydro strongly welcome these legislative and regulatory efforts and firmly believe in transparency being a catalyst for the green transition, we also see some implications in the implementation of the reporting regulations, potentially undermining their efficacy.
“I had the pleasure to sit down with opinion leaders of Norwegian industry to discuss some of the key challenges that we foresee from an industry perspective. In the panel sat: Kiran Aziz, Head of Responsible Investment at KLP Asset Management, Kristian R. Anderson, Managing Director Norway at Position Green, Thor Giæver, CFO at Yara, Lars Aasluv Løddesøl, CFO at Storebrand and Magnus Young, Head of ESG reporting at Hydro,” says Pål Kildemo, Chief Financial Officer at Hydro.
Chapter one: Timeline
In chapter one, we discuss the implications of timelines proposed by the EU, the necessary shift in finance organizations, as well as the intricacies of defining sustainability when corporate structures are complex as they operate globally through supply chains.
Chapter two: Defining what is sustainable
In chapter two, we focus on what is currently eligible to be classified as sustainable and the implications of such definitions on transparency and competitiveness when they do not reflect business realities.
Chapter three: Comparability with companies outside of the EU
Although there are many initiatives and directives being implemented or discussed at a nation state level outside of the European Union, such as the Inflation Reduction Act in the US, they tend to differ in ambition level, purpose and overall targets. In this chapter, we share our view on the implications this might have for European competitiveness from an industry perspective as well as how this impacts companies operating in different jurisdictions.
Chapter four: ESG reporting as a decision making instrument
In the fourth chapter of our series, we discuss whether the increase of mandatory disclosure on qualitative sustainability information also leads to a better integration of ESG into decision making on industry and policy level as well as how investors, companies and regulators must come together to create frameworks that enable industrial players to accelerate the green transition.
Chapter five: Public private collaboration
How can the private and public sector work together to drive the green transition, ensure transparency across industries and maintain competitiveness on a global scale? With this question, we conclude our series on the practical implementation of the ESG reporting regulations.
What has become clear throughout the discussion is that although following reporting requirements is part of our license to operate as industrial companies, we can achieve much more if we see ESG frameworks as tools to be applied for reasons beyond mere compliance. For this, we need to quantitatively and qualitatively understand where our biggest impacts lie and collaborate with partners, customers and stakeholders on the political landscape to jointly build #IndustriesThatMatter.