This is very troubling from Politico Europe:
BRUSSELS — A rule forcing companies to measure and report the environmental damage they cause is at risk in the European Union's deregulation drive, three people briefed on the discussions told POLITICO on Friday.
A draft of the upcoming “omnibus” simplification legislation circulated to commissioners by European Commission President Ursula von der Leyen's team scraps a principle known as "double materiality" in the EU's new Corporate Sustainability Reporting Directive (CSRD), two of the officials said. All sources were granted anonymity to discuss sensitive internal issues.
Double materiality is a central concept of the European Green Deal, meant to shift the paradigm on green corporate regulation. It requires companies to consider the damage they are doing to the planet, not just the risks climate change poses to their financial health, as in more traditional sustainability reporting standards.
This is not some esoteric accounting argument. The question being discussed here is whether or not multinational corporations are responsible for creating harm to the environment, and so should account for that cost within their own financial reporting, accepting the consequences as a result.
The kickback from the right is to say that they are not responsible, letting them off the hook as a result.
I, of course, argue that they are responsible and must be accountable for the costs.
The argument is profoundly philosophical in a way that most people never realise that accounting is.
There is, of course, only one right answer for financial reporting, people and the planet. Brussels is going the wrong way.
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The argument is presumably is that it it burdensome for a business to have to measure and report the impact that it has on the environment. Unfortunately such impacts are often externalities so businesses can ignore them, but such impacts are not cost-free for the company or for everyone else. If there are no impacts they can report that. If there are, we ought to know about it.
As I understand it, the CSRD only applies to “large” companies (plus listed companies if not “large”). The important thing is that the reporting obligation should be proportionate to the risks and impacts.
My sustainable cost accounting provides a way to manage this
It would be sad and bad for the EU to imitate the Trump administration so that we have a race to the bottom on these issues in the name of competitiveness. We may have to grin and bear it in the short term, but long term it is very troubling and very damaging.
I would be happy for the ECB to print money and help corporations with the cost – but that would be too creative for the ECB and I bet abused by the corps’ anyway.
This sort of thing though is useful in reminding us just how much work would need to be done to correct the status quo – it’s not as if everything was peachy before King Don got in – things were pretty ropey and not fit for use then. What the Trump Corporation has done is push back on efforts, made the climate the problem. the source of voters woes and not question the greedy short term way we do business which is actually the problem.
No, it’s idiocy. Double materiality means that a company is financially responsible for its Scope 3 emissions. Scope 1 is what happens in your supply chain. Scope 2 is in your own processes. Scope 3 is in what your people use your products to do. As is obvious, the Scope 2 of one bloke are the Scope 1 of the next in the supply chain, the Scope 3 of the first the Scope 2 of the next and so on. You want to insist that everyone’s responsible for their Scope 3. Which means that no one at all is responsible for their own Scope 1 or 2. This is complete lunacy. Brussels is definitely going the right way.
Why shouldn’t it be responsibloe for the harm it causes?
Of course I insist a company is responsible for the consequences of its products – it’s a principle long established in law. Why do you want an exception in this case?
Tbhis is not lunacy – this is sanity – and the only route to it
The biggest myth ever purported was that the EU was the continent’s utopia .
Just to be clear I voted to Remain in the EU in 2016 but only because I thought it would be a difficult process to leave given the lack of ability of our politicians .
I’ll debate with any EU fanatic who contributes to the Guardian comments section and believes the road to Damascus actually ends in Brussels .
Whilst we didn’t actually need to leave , the EU most definitely needed reform and those with the power in Brussels weren’t too enthusiastic about having that conversation in my opinion .
It’s all well and good having a hissy fit about Vance’s recent comments in Munich but he wasn’t totally wrong either .
I’ll get out my tin hat in readiness for the replies to this post .
It’s hard to be an enthusiast for the EU
It’s very very hard to think our destiny is not with Europe
But then I think myself a European
Some Commission people that I know well (long serving senior people) think that it is high time for substantial reform. One of the problems is that the Commissioners don’t know much, ditto their cabinets and the lower ranks are no longer allowed to have initiative = do things. They just follow orders from “up top”.
I’d add that the commnet about Commissioners not knowing much I got from a lobbyist that had a whole weekend in their company. He came away frightened at the lack of knowledge.
There does appear to be a dangerous degree of central control right now.
The best answer I’ve seen was from the early 2000s from a guy that got into the House of Lords. The answer was to try and measure those environmental impacts in terms of net costs. Why is it wrong to use prices?
My guess is you know nothing about accounting
My guess is you think you know more than the people who got a Nobel prize for this stuff. But you don’t!
Where is your peer reviewed paper that explains why Stern got it wrong and why your approach is better?
Go and read Steve Keen on this and stop being such a total idiot.
Of course corporates should account and pay for the harm they cause to the environment. As they should be accountable for and pay for the infrastructure provided by the state that enables them to operate and function
Tomorrow, the Climate Change Committee (being the UK’s the statutory adviser under the Climate Change Act) will advise the UK government on the level of its Seventh Carbon Budget – the legal limit for UK net emissions of greenhouse gases over the years 2038 to 2042.
https://www.theccc.org.uk/news/coming-up/
I really don’t see how nations can be accountable for carbon emissions, if corporations are not measuring and reporting.
Agreed