EU specifies non-financial reporting requirements: Reporting obligations to apply to smaller companies as well

The Taxonomy of sustainable activities will be subject to a number of adjustments and updates in the future. However, medium-sized and smaller enterprises should already take this EU regulatory system into account in their operations and subsequent reporting. Environmental legislation is extensive and dynamic in this respect. Adapting to new rules at the moment they become effective could entail unnecessary problems for companies. Read our summary of the most important developments in this area in recent months and be prepared for the future today.

Essential review of the forest and soil protection legislation is getting sharp outline

Late 2021 brought several new developments for the forestry and agriculture industry, which will also represent the main topics in the months to come. First and foremost, the European Commission’s proposal for a regulation that aims to integrate sustainability conditions into placing timber and selected agricultural commodities on the EU market. The adoption of the new EU Soil Strategy for 2030, which takes into account the potential and essential benefits of soil, also forms a part of the new comprehensive environmental solutions. Following the debate on offset projects, the OECD working paper titled ‘A global analysis of the cost-efficiency of forest carbon sequestration’ provides an interesting perspective.

The European Union assesses changes and progress in the implementation of energy policies

The recent rise in energy prices has made it clear that Europe needs to decrease its energy dependence. The European Green Deal and an increasing share of clean energy will lead the way forward. The European Commission’s reports along with Member States Cooperation Mechanisms highlight the potential of renewable energy sources and the critical role they play in achieving the objectives set for climate neutrality of the EU.

The EU wants to support green transport with focus on railways

One of the biggest environmental challenges across the EU Member States is to prevent greenwashing and provide a unified approach to environmental protection. The EU has therefore issued a manual to ensure that even a tried and tested system such as the Environmental Impact Assessment (EIA) is unified. At the same time, a recommendation for establishing an environmental footprint in the circular economy has been issued to ensure a unified and transparent system for the sustainability assessment of suppliers, services and goods. Last but not least, a new plan to boost the railway sector has also been adopted to ensure that this type of long-distance and cross-border transport is developed to help achieve the EU’s sustainability objective.

The European Central Bank will focus its 2022 bank stress tests on climate risks

Towards the end of 2021, two important EU taxonomy implementing regulations were published in the Bulletin of the European Union. These include a set of technical screening criteria regarding climate and a delegated act executing Article 8 of the Taxonomy Regulation, which specifies the requirements for non-financial reporting. Despite significant delays, these regulations came into force at last, and the first obligations arising from them can therefore become effective in 2022. Another document worth mentioning is a new study of the European Commission, which revealed that the income from ecological tax and environmental fees in the EU is insufficient. Even the European Central Bank plans to focus on climate risk – it will be one of the major topics of bank stress tests in 2022.

First calls under the National Recovery Plan

The Ministry of Industry and Trade is preparing the first calls from the National Recovery Plan (NRP), which are expected to be announced during February. The NRP aims to revitalise the economy through subsidies and help address the economic and social impacts of the coronavirus pandemic. Other objectives of the NRP include assisting with the implementation of green and digital transformation, enhancing productivity and achieving sustainability. To finance the green projects, the Ministry of Industry and Trade of the Czech Republic plans to release funds for the calls listed in the table below.

COP26 fails to achieve fundamental goals

The Glasgow Climate Change Conference brought much debate at the end of 2021. Unfortunately, the states failed to meet public expectations and the conference ended on a bitter note. At the same time, a newly issued Emissions Gap Report speaks clearly − in order to keep the target of limiting global warming to 1.5 degrees Celsius alive, the global commitments of the Paris Agreement must be met by 2030. The EU is well on the way to achieving the said goal, as its report states it had exceeded the set emission reduction targets already in 2020. In 2021, however, it is expected for the emissions to increase, which leaves the EU with the crucial task to maintain the set trend.

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