Business's 4 priorities for a green and competitive EU

The recent European elections have shown the winds of change are blowing.

Concerns about the socio-economic impact of Europe’s climate transition have become increasingly politicized, and these messages have resonated with large parts of the European electorate. As new political positions and alliances cement in our capitals and Brussels, the private sector leadership to express our support for a clear path towards a more competitive, resilient and inclusive economy that prioritizes environmental and climate-related sustainability, while driving growth and jobs.

Seizing this moment is crucial to set a direction that balances continued ambition with pragmatism on the road to a stronger, more future-proof EU. We can only ensure sustainable growth by investing in the future.

The CEO Action Group for the European Green Deal is a community of more than 50 global businesses that employ more than 1 million people in EU and are at the forefront of the net-zero transformation. We are dedicated to supporting a thriving clean industrial ecosystem in Europe. Our companies spend billions on R&D annually to support innovation and industry. In 2023, our members spent more than €27 billion on innovation globally.

As co-chairs of the CEO Action Group, we view the European Green Deal, launched by the EU in 2020, as reflecting an ambitious commitment to bring the region towards climate-neutrality by 2050. We see the Green Deal as a critical and holistic growth strategy for building a resilient economy with thriving businesses. Achieving our net-zero emissions goal by 2050 is the path to that growth.

The Green Deal is not only a set of cross-sectoral legislative packages aimed at protecting the environment; it also serves as a catalyst for sustainable growth in Europe, driven by innovation, production and adoption of green technologies throughout the region. It positions the EU for competitiveness, strategic interdependence and sustained economic prosperity.

Looking ahead, the EU needs a vision that balances ambition and pragmatism, particularly as innovation in critical climate technologies – from renewable energy to electric vehicles, biosolutions and carbon capture technology – is developing at a breakneck speed in other regions. In this context, the Clean Industrial Deal recently announced by European Commission President von der Leyen is welcome and the case was further strengthened by several priorities highlighted by Mario Draghi’s recent report on European Competitiveness, including an enhanced focus on innovation and skills.. To fully realize the potential of the Green Deal as the EU’s growth strategy, the Clean Industrial Deal must urgently align green policies with industrial policies – industrial in the sense of setting Europe on a firm path to competing globally in the industries of the future.

The EU has been a cradle for exceptional companies, pioneers in research and development, especially in clean and transformative technologies. But while great companies are born in the EU, many leave when it’s time to grow – we need to reverse this trend now. Here are key perspectives to consider:

We need regulations that help EU industries gain a competitive advantage, increase productivity and grow – simultaneously. This involves introducing innovation-friendly regulation, including measures to increase the risk-appetite of European investors by developing transparent risk-sharing instruments, and streamlining approval processes for sustainable solutions in areas such as renewable energy, agriculture and food products; while incentivizing increasing energy efficiency and limiting food waste. The proposed 25% reduction in the reporting burden is a good step forward, but ensuring coherent progress here will be key. Speeding up market access is essential for EU-based companies, including permitting processes. Levelling the regulatory playing field across member states would contribute to a more connected and deepened single market and further help companies scale up across the EU.

The EU financial support system should incentivize investment within the EU. In striving to develop a level playing field, we should favour future-oriented technologies over outdated ones, without compromising safety. The EU needs a coordinated approach to fund its future industries, linked to emissions-based criteria and locating them where the economic efficiencies are the highest. This would also further region-wide sustainable infrastructure such as recycling plants, to extend the use of critical raw materials.

The EU should actively nurture breakthroughs and scale-up capacity for innovative and clean technologies – with areas like carbon capture, fermentation, wind power energy and sustainable liquid fuels deserving particular attention. Continuous dialogue with innovators and companies at the forefront of net-zero and sustainable innovation will be key. The model of using Clean Industrial Dialogues should be continued as a tool for strengthening the feedback between the public and private sector to ensure that Europe is moving in the right direction as a whole.

People remain at the core of Europe’s climate transition. For tomorrow’s industries to scale up and to ensure that the public remains supportive of decarbonization, we must ensure that there are sufficient good jobs in the EU that align with changing labour market needs. The link between the green transition and higher prosperity has to be strengthened, and we must ensure that vulnerable European households in particular are incentivized to go green in their everyday lives. We hope that the European Commission’s upcoming “Union of Skills” can contribute to this goal.

We as co-chairs as well as our peers in the CEO Action Group stand ready to work with public, private and expert communities to continue moving Europe towards green competitiveness and higher prosperity for all. By maintaining our commitment to the green transition, embracing innovation, refining our regulatory environment, increasing the depth and resilience of our financial markets, we can create the conditions for sustainable growth and forge a future that benefits all citizens in the EU. An Industrial Green Deal will help us build an EU that thrives economically while safeguarding our planet.

For more information on joining the CEO Action Group for the European Green Deal, email europeangreendeal@weforum.org

Feike Sybesma and Ester Baiget are currently co-chairs of the CEO Action Group for the European Green Deal.