A Clean Green Deal

Written by Karen Melchior and Lara Wolters on 23 September 2019 in Opinion
Opinion

The Green Deal is at the heart of the EU’s ambitions of becoming climate-neutral. Transparency is essential to its success argue Karen Melchior and Lara Wolters.

 Photo credit: Adobe Stock


This September, millions of citizens have taken to the streets in major cities around the world, calling for decisive action in the face of the unfolding climate crisis.

In this context, the European Green Deal is undoubtedly one of the most-anticipated priorities of the incoming Commission, as it will demonstrate the EU’s willingness to lead by example.

We intend to ensure that the EU delivers on the Green Deal promise. The Green Deal is intended to set Europe on a course to become climate-neutral and position it as a world leader in the circular economy and clean technologies.


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To succeed, the huge financial flows that fossil fuels will generate - even while being phased out - should be used for sustainable development and climate action.

In addition, the transition to green energy sources will continue to require rare minerals, e.g. to manufacture rechargeable batteries for electric vehicles. Therefore, as a part of any Green Deal, we must increase the transparency and sustainability of the global supply chains of European companies sourcing these minerals.

Too many countries in Africa and elsewhere are being hit by the resource curse, where the exploitation of their natural resources leads to conflict, environmental destruction and corruption.

At a time when they ought to be thriving, with adequate funding for schools, hospitals and infrastructure, they are among the world’s poorest.

Knowing how much money mining and oil companies pay to extract resources and who benefits from these payments it is essential to ending this ‘paradox of plenty’.

In 2013, we took a step in the right direction. Often, deals signed between companies and governments are shrouded in secrecy, even if they are legal, and help fund national budgets.

“As a part of any Green Deal, we must increase the transparency and sustainability of the global supply chains of European companies sourcing these minerals” 

The EU Accounting and Transparency Directives were amended to require mining, oil, gas and logging companies to publish their payments to governments around the world. If citizens know how much money is going to their governments, it will now be easier for them to decide how it is spent.

Since then, extractive companies in the EU have disclosed nearly €600 billion in payments. Shell alone has reported €80 billion in payments, including over €17 billion for projects in Nigeria. Danish companies have reported €4.5 billion in payments.

Similar laws are now in force in Canada, Norway and Ukraine, meaning that thousands of company reports are now available, demonstrating the global influence of EU leadership.

The Commission’s ‘Fitness Check on Public Reporting by Companies’ confirms the significant benefits of these requirements. They provide civil society organisations, such as ‘Publish What You Pay’ (PWYP), a global alliance for an open and accountable extractive industry, with important information for holding companies and national governments to account in countries like Kazakhstan, Mozambique and Niger.

However, stakeholders and experts agree that the legislation needs updated to make it more effective. This review was due to be completed by July 2018 – the delay is thanks largely to the slow transposition by Member States of this innovative law.

“Tabling legislation to strengthen the reporting obligations of extractive companies is a low-hanging fruit”

The review now offers a concrete opportunity to translate the ambitious goals of the Green Deal into meaningful action. Tabling legislation to strengthen the reporting obligations of extractive companies is a low-hanging fruit; information on these payments made should be more accessible, consistent and comprehensive.

The revision of the extractive transparency legislation should be part of a broader agenda of ensuring that European companies uphold human rights and environmental standards globally.

We will push the von der Leyen Commission to advance legislation that requires all companies to address the negative impacts of their activities on people and the planet through mandatory due diligence throughout their global supply chains.

Vice-President Timmermans will have strategic leadership over the Green Deal. His capacity to enlist the support of fellow Commissioners in charge of a wide range of policy areas will be key. This includes Valdis Dombrovskis for Financial Services, Didier Reynders for Company Law and Phil Hogan for Trade.

We will ensure that questions on how they intend to play their part in delivering on the Green Deal ambitions are a central part of the upcoming hearings.

‘Business as usual is not an option, the climate won’t wait!’ was a message endorsed by many Europeans in the May elections. This has been repeated loud and clear by those marching for the climate this week.

As the newly elected European Parliament, we must ensure this call is heeded. The Green Deal must deliver concrete action quickly; transparency of extractive industries and corporate accountability for human rights and environmental standards must be a priority of the new Parliament and Commission.

We want a socially-sustainable European Green Deal. This requires European companies to be transparent and accountable wherever they operate.

We will make this a central demand of the new Parliament to the incoming Commission.

About the author

Karen Melchior MEP (DK,RE) is group coordinator for the parliament’s Legal Affairs committee.

Lara Wolters MEP (NL,S&D) is a member of parliament’s Legal Affairs committee

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