Until a couple of years ago, emissions management sounded like a miracle. But new and younger companies have begun pushing the public debate around it immensely. In 2019 milk alternative producer Oatly started printing the carbon footprint of their product on every package and demanded other competitors to follow their example. This is just one of many cases in which companies actively confronted governments with their claims for a more sustainable world. On the other hand, customer’s voices have become louder as well. When Fridays for Future started, we not only got a movement for saving our planet , but a whole generation who began to openly confront governments about their lack of attention to the ONE problem we need to get under control: our CO2 emissions.
This raises a very critical question: Who should be accountable for reducing emissions and how do we ensure that the involved parties do not push their responsibility away? Let’s stay with the first part of the question for now: For a long time, consumers were blaming governments for doing too little for the environment, especially when governments were seen to be protecting companies from needing to invest money and resources into sustainable change. Sustainability was often seen as a threat to working business models, especially when resources were scarce, and taxpaying employees need to be protected. In the eyes of many consumers, governments failed to push the change themselves, which led to an environmentally conscious change in mindset for many people. Consumers suddenly held themselves accountable for the change, realized they had more power than they thought and began to change the economic landscape. Even when a lot of companies have been and still are accused of greenwashing, there is a general trend for companies to try seriously to reach sustainability goals, doing justice to their customers.
Why then is it even necessary to discuss legal interventions in the sustainability movement? The global CO2 emissions are rising every year. And even though there have been substantial changes over basically all industries, the global climate goals of reducing emissions drastically until 2030 demand changes that go beyond a voluntary investment. Instead, governments need to work towards a universal approach that not specifically forces companies to implement changes but rather enables them to pursue a carbon reduction in line with their economic targets.
As you can probably imagine, it is hard for companies to grow and at the same time reduce their emissions. So what needs to be done at the legal front to achieve a net-zero future?
Exactly one year ago, one of many important inter-governmental interventions came into force: The Sustainable Finance Disclosure Regulation (SFDR) was implemented by the EU to increase transparency between companies and financial institutions on the topic of sustainability. Transparency is generally one of the major issues in carbon emissions management. As long as reporting is neither mandatory nor standardized, it is nearly impossible to compare companies in their sustainability efforts. Numbers are therefore the only way to measure a successful reduction of emissions. Therefore it is only a matter of time until mandatory reporting on CO2 emissions will increase the value of sustainability reports. As part of the Corporate Sustainability Reporting directive which will be adopted in October 2022, precise sustainability reporting will become mandatory for all large enterprises. This regulation originates from a softer regulation adapted in 2017 that was tightened and enlarged to more and more companies over the last years.
In an ideal world, we will see transparency in CO2 emissions reporting become the new normal through the support of government legislation. Tracks is already taking action, and our environment is ready for action too. Therefore, we encourage governments to consider the climate, support innovation, incentivize decarbonization, nudge companies towards optimistic emissions goals. We’re all working together in the fight for our planet and that is the only way to reach net zero.