To meet its commitments made during the Paris Climate Agreement and to promote a more sustainable recover to the economy post-pandemic, the European Union have set our a comprehensive plan called the European Green Deal. The objective of the deal is to create a prosperous and sustainable economy for the bloc. There are significant impacts for businesses across the variety of policy instruments included in the deal.
In this article, we provide an introduction to the European Green Deal and the broader European sustainability policy landscape. We assess what the policies mean for business and how they can effectively adopt them. This is part of a series or articles, looking at the sustainability policy landscape for businesses operating within the EU.
Objectives of the European Green Deal
The EU is a signatory to the 2015 Paris Climate Agreement to restrict global warming to well below 2°C. To meet their legal obligations in that commitment and to create a fair and prosperous society along with a modern economy, the EU developed the European Green Deal. This has become a landmark transition plan by the state, providing a cross sector approach using all available policy areas and mechanisms.
What's Included in the European Green Deal?
The Green Deal includes 12 major initiatives, described below. These combine to provide a holistic approach to transitioning the union to a more sustainable model. There are obvious areas in scope, such as addressing climate change and reducing emissions. There are also areas demonstrating the states ambition to achieve a just and fair transition whilst maintaining competitive markets and supporting innovation in business.
Fit for 55
Fit for 55 is a package of policies designed to enable the EU to meet its commitment to reduce its emissions by at least 55% by 2030. The package covers climate laws, energy, transportation and includes some of the most prominent EU policies. Policies such as the Carbon Border Adjustment Mechanism (CBAM), Emissions Trading Scheme (ETS) sit within the Fit for 55 package.
European Climate Law
The EU adopted the European Climate Law Regulation in May 2021 to define a legal basis for the commitment to be climate neutral by 2050.
EU strategy on adaptation to climate change
With the intent of avoiding the risks posed by climate change to society, the EU endorsed a strategy to become a climate resilient society. This focuses on prevention, preparedness, response and recovery to the threats posed by climate change.
EU biodiversity strategy for 2030
Across the EU nature is in decline. To prevent further loss and to restore nature, the EU has agreed laws under a biodiversity strategy. This urges member states to develop nature restoration plans up to 2050.
Farm to fork strategy
Food systems play a major part in contributing towards climate change. To align the food sector in the EU to a more sustainable model, the Farm to Fork strategy sets out an approach to ensure the system operates within planetary boundaries.
European Industrial strategy
The most important groups when it comes to climate change are the industrial sectors. The industrial strategy guides businesses towards more sustainable models to build market resilience, whilst maintaining international competitiveness.
Circular economy action plan
At the heart of the green deal is a focus on building a more circular economy across the EU. The intent is to make it easier for consumers to repair, replace and reuse products. This will reduce waste, resource usage and improve affordability and durability of products.
Batteries and waste batteries
The electrification of many aspects of the economy will increase the dependencies on battery technology. To ensure the market matures with circularity and environmental considerations built in, the EU plan looks at the entire lifecycle of batteries from original design to reuse and end of life.
A Just Transition
A term used increasingly as economies transition, a just and fair transition is imperative for the EU. The EU is intent on ensuring society moves forwards collectively. The EU is using its powers to protect against the risks of leaving communities behind including the provision of a fund to support the work.
Clean, affordable and secure energy
The largest source of emissions in the EU is from the production and use of energy. It follows that within the Green Deal there are significant policies related to decarbonisation of the energy sector. There is also a strong focus on energy efficiency including in the built environment.
EU chemicals strategy for sustainability
Chemicals play a vital role in the production and make up of many products produced and consumed within the EU. The Green Deal includes policies which build on existing safeguards around the use of chemicals, to align the sector to a more sustainable model.
Forest strategy and deforestation
Finally, a focus on the forestry strategy for the union combines efforts to improve biodiversity across the forestry within Europe and to promote more environmentally and sustainable methods.
Policy Map
The strategic areas described above deliver a complex and interconnected set of policies which combine to achieve the overall objectives. To help to convert these policies into action for businesses, we map them to five key groups. The groups are not exhaustive and include many overlaps, but they capture the majority of instruments which relate to most businesses.

These groups represent logical collections which relate to how a businesses operate. At the centre, covering everything the business does, is reporting. This provides a clear and consistent set of standards a company can use to communicate it position and performance related to sustainability.
The Due Diligence group is the next to consider. This group collects together the policies which define how a business should operate to identify, prevent and repair adverse effects within its value chain.
Moving to Product Design, there are significant changes in regulations. These define how a company must adapt its design approach for new products aligned to the broader objectives of the Green Deal.
Consumer protection policies work to achieve multiple objectives. Consumers within the EU need to be given clear, accurate and consistent information about the products they consume. There are also policies in this space to ensure products can be repaired more easily and affordably, promoting circularity.
The final group is Energy and Environment. This group includes policies related to energy supply and efficiency, it includes regulations impacting practices by businesses which have negative environmental impacts. The group also contains policies related to nature restoration, land use, forestry and deforestation.
Other Policies
With a diverse range of policies in a package such as the Green Deal, it is difficult to make them all fit neatly into logical groups. Equally, many of the policies span across groups and some sustainability policies are not explicitly connected to the Green Deal. Whilst our approach to group policies is designed to make it as simple as possible for businesses to understand the landscape, it isn’t intended to be an exhaustive study. Our work with clients spans across all policies relating to sustainability. We use the context for each business and its value chain to identify the areas of policy across jurisdictions which are relevant to each client.
How can businesses navigate the Green Deal?
There is no question that the policies within, and related to, the Green Deal have the potential to significantly impact businesses. From standardised disclosure requirements to value chain due diligence, there’s a lot to work on.
Many businesses operating inside the EU already adhere to a broad range of regulations which influence their products and operating model. Many elements of the green deal enhance existing instruments, meaning the delta for most businesses is manageable but still requires work.
It’s important for businesses to firstly identify which policies they fall within the scope of and the time horizon for the policy taking effect. This helps to get a clear outline of what’s required in broad terms. From this, a business can work on understanding the delta between where they are currently and where they need to be and over what timeline.
For the most part, the policies within the Green Deal result in a business adapting its operating model to take them into account. To help with this, we use a framework which helps businesses to be clear about the actions required to comply with the legislation and the internal controls to put in place to safeguard them.
What we do
We specialise in helping businesses to adopt and integrate sustainability policies into their operating model. Our specialists get under the skin of the policies across the whole landscape and use our experience to convert the text into action. We focus on being pragmatic, straight-forward and helping businesses to make progress.
If you’d like to learn more about what we do, or how we can help your business, get in touch.