In the wake of the coronavirus crisis, the European Union is trying to boost Europe and carry out the projects it had planned before the pandemic. In December 2019, Von der Leyen, the current President of the European Commission, presented the European Green Deal. This is a strategy that aims to achieve a green and low-carbon economy within a few decades. This strategy requires the mobilisation of 1 trillion euros and additional public and private investment.

The coronavirus recovery plan has caused this strategy to accelerate, as Spain, along with other European countries (Austria, Denmark, Finland, Italy, Latvia, Luxembourg, the Netherlands, Portugal and Sweden) has called on the European Commission to use the Green Deal to help boost Europe’s economic recovery from COVID-19. Thereby, a green and fair recovery is expected to transform Europe into a sustainable economy.

Green Deal policies and measures

Among the policies of action of the Green Deal, we can find sustainable industry, building and renovation, biodiversity or clean energy. These measures will involve the entire Spanish population in one way or another, as one of the main objectives of this deal is “to leave no one behind”. All these changes may cause uncertainty and concern among Spanish companies about the future of their businesses, how it will affect them and how they will have to change, but the truth is that the EU has already studied the impacts of this plan on companies and how to help them.

To achieve the objectives of the green pact, both the public and private sectors must work together, which is why a new financial tool called the “Just Transition Mechanism” has been created.

The Green Deal, supported by the “Just Transition Mechanism”, offers a broad coverage that aims to protect the most affected member states by this new initiative, as well as their businesses and citizens. The European Union is aware of the impact that these policies will have on society and has therefore developed different ways of financing and investing that promote the circular economy and considers that public financing will give a boost to private initiatives. To maximize the impact of the agreement, the plan is to mobilize at least one trillion euros in investments over the next 10 years, combining different sources of capital to finance sustainable projects that are relevant to the implementation of the Green Deal.

Together with other European programmes, Horizon Europe will play a key role in leveraging public and private investment by supporting companies’ efforts to innovate and implement the Green Deal by allocating 35% of its budget to them. The European Innovation Council will support the implementation with acceleration services and participation in companies, with the aim of maximising the possibilities of SMEs by taking them to a global level and thus positively affecting the European market. The European Union is determined to boost SMEs through the creation of the favourable investment conditions mentioned above; it will also facilitate access to financing tools and programmes that promote research, development and innovation.

The role of companies

One of the main novelties of this new strategy is the role given to companies. They have an important role in terms of the impact they have on nature through the materials they use, but they also have the capacity to innovate, inspire, motivate and provide new solutions to society. In fact, in 2021 a legislative proposal on sustainable corporate governance will be launched, which will address the care of the environment by companies.

Until then, it would be interesting for companies to evaluate their activity on biodiversity and measure their impact on natural capital. The strategy also calls for biodiversity to be integrated into business decisions at all levels. This is why the EC will work in 2021 to achieve standards for measuring and quantifying impacts on ecosystems and their services. It is therefore necessary for businesses to begin projects to monetise their impact in order to be prepared for the methods that this strategy will implement.