German Industry Lobbies for Easing Environmental Standards
Unleashing the Real Economy: BDI's Call for Fundamental Sustainability Regulation Changes
In sync with the Association of German Banks (BdB), the Federation of German Industries (BDI) is pushing for a significant overhaul of sustainability regulations. The BDI's new policy paper squarely calls out for a fresh political approach, claiming that the ecological transformation should be shaped by the real economy.
The BDI argues that the current sustainability regulations are ineffective and costly, hindering the economy rather than aiding the cause. Current measures, such as the Corporate Sustainability Reporting Directive (CSRD), are overly complex and should be simplified, according to the BDI's Chief Executive Tanja Gönnert.
Gönnert warns that the next German government must take a proactive stance in pushing for fundamental adjustments in Brussels. She suggests that the focus should be on economic and climate policy solutions, rather than costly financial regulations. Key demands include increased public investment in infrastructure, greater risk reduction through economic policy measures, and more venture capital.
The paper contends that the effectiveness of capital steering measures is low, while also being accompanied by high costs due to the complex web of rules and regulations. The BDI deems it a disservice to the cause. The BDI proposes a series of changes, such as streamlining the CSRD, making the EU taxonomy voluntary, viewing transformation plans as "general signposts," and addressing the challenges of ESG ratings.
Swift implementation of the CSRD is essential following the federal elections, and the BDI urges the new government to push for simplifications in Brussels, with limitations on sanctions during the first year of application and the inclusion of independent third parties in the review panel to avoid competitive disadvantages for German companies.
The BDI also discourages "small-scale attempts at control via the financial markets" and advocates for more real-economy, market-based solutions instead. The state could support the transformation by investing more in infrastructure, for instance, in the electricity or hydrogen network.
Challenges in the transformation often occur due to politically-induced price increases of crucial input factors, the use of immature technologies, or high initial investments, the BDI notes. For companies and their ecological investments, a basic ability to finance these projects, primarily through internal financing and supplemented by loans, should be ensured, the BDI maintains.
In addition, the industry association suggests that an EU auditing standard could counteract the lack of uniformity when it comes to auditors and their roles in sustainability regulation, both within Germany and across Europe.
- The BDI, in agreement with the Association of German Banks (BdB), asserts that the real economy should shape the ecological transformation, and they call for fundamental changes in sustainability regulations.
- The BDI's Chief Executive, Tanja Gönnert, advocates for simplifications in sustainability regulations, such as the Corporate Sustainability Reporting Directive (CSRD), to make them more effective and less costly for the industry.
- In order to foster economic and climate policy solutions, the BDI proposes increased public financing for infrastructure, greater risk reduction via economic policy measures, and more venture capital.
- The BDI advises against small-scale control via the financial markets and instead recommends more market-based, real-economy solutions, such as state investments in infrastructure like the electricity or hydrogen network, to facilitate financing for companies' ecological investments.
