Negotiators from the European Parliament and EU Member States recently reached an agreement on new EU rules to combat so-called ‘greenwashing,’ whereby companies present themselves as more environmentally friendly than they really are. The new rules impose a variety of new reporting requirements—first on large companies, later on also on small and medium-sized enterprises (SMes)—with the aim of “better informing” citizens about “the impact that companies have on human rights and the environment,” according to Bruno Le Maire, the French economy minister, who acted as a mediator in reaching the compromise.
In the same vein are the European ‘taxonomy’ rules, which involve the EU coming up with a kind of classification system of how environmentally friendly investments are, with the intention of increasingly linking legal and fiscal consequences to this. The philosophy behind all this is that of the so-called ‘ESG criteria,’ an acronym that stands for ‘Environmental, Social, and Governance’. ESG measures environmental goodness by how little humans impact Earth. Sri Lanka, for example, received an ESG score of 98 out of 100 because, among other things, it imposed a far-reaching ban on artificial fertilisers in April 2021.
In Sri Lanka’s case, this was also one of the reasons for the country’s recent bankruptcy. The measure decimated its agricultural sector, which had previously been self-sufficient in rice production. Combined with irresponsible monetary policy, this led to high inflation rates, supermarkets running out of food, and large-scale protests that forced the president to flee both his palace and the country. In short, ESG is not exactly a resounding success.
This does not stop leftist politicians, like Canadian Prime Minister Justin Trudeau, from continuing along this policy path. He wants to drastically reduce the use of fertiliser by farmers, ignoring both the agricultural sector and some Canadian provinces, which have warned:
Western Canadian farmers already produce the most sustainable agri-food products in the world, and they’re continually being asked to do more with less. We cannot feed the growing world population with a reduction in fertilizer.
As with the Dutch nitrogen policies that have provoked massive farmer protests, Trudeau’s intention is to reduce nitrogen emissions in this way, and this is now also leading to protests in Canada.
Business as usual
At the EU level, environmental policies are mostly being continued as if there were no Russian invasion of Ukraine or large-scale energy crisis. For example, it is ‘business as usual’ when it comes to the so-called European Green Deal, which involves an expansion to more sectors of the EU Emission Trading System (ETS), which is actually a type of EU climate tax. It forces companies to buy CO2 emission rights, something for which the end consumer ultimately pays.
A good illustration of how the European policy machine remains blind to what is happening on the ground is that the Netherlands would now also lose an exemption from EU rules restricting manure use, which would hit Dutch farmers yet again—all this despite the extremely strong opposition to other EU-inspired rules on nitrogen, which even catapulted the newly-launched farmers’ party to the second largest in the country in the polls.
The new European rules against ‘greenwashing’ are yet more evidence of the great influence green NGOs have on the European policy-making process. Palm oil producers from countries like Malaysia are also victims of this. Despite the fact that the industry of this leading exporter of palm oil has developed a sustainability label, with which 90% of the production complies, the EU still attempts to impose far-reaching new restrictions on the import of palm oil, supposedly in the fight against deforestation. This despite the fact that palm oil is more sustainable than other vegetable oils, given that the yield per hectare is much higher than for, say, rapeseed, soya, olive or sunflower oil.
The World Wildlife Fund (WWF) also states that it is preferable to “support sustainable palm oil and avoid boycotts, since we know substitutions with other vegetable oils can lead to even further environmental and social harm.” The palm oil industry has made great progress according to the NGO CDP’s Global Forests Report 2020, which notes that there is a “27% increase from 2019… in companies disclosing on how they are managing deforestation and 93% of companies we analyzed are taking at least one industry-accepted action to safeguard forests.” In sum, industry initiatives can have a positive impact, despite the skeptical attitude at EU level.
Particularly worth mentioning is European ‘climate’ Commissioner Frans Timmermans, who is using increasingly apocalyptic language to defend his “green deal”, and who also does not hesitate to present UN climate reports in a more alarmist light than they are. One of his most recent moves was to propose a special day of remembrance to “commemorate the victims of these horrible weather patterns caused by the climate crisis.” Quite apart from the question as to whether the devastating floods that rocked Belgium and Germany last year were due to climate change and not to failing water management, Timmermans was chastised for his proposal by Ronald Plasterk, a former Dutch minister and former party colleague of Timmermans, who wrote in De Telegraaf: “Timmermans uses [the] suffering of others to make [his] own political portfolio more important.”
In any case, it should be clear that such a hysterical policy approach to environmental problems, which involves ever more far-reaching restrictions, is dominant among EU policy-makers, unfortunately. Hopefully it will not need to come to that, but energy shortages over the winter may put an end to this.
Pieter Cleppe is the editor-in-chief of BrusselsReport.eu, an online magazine covering EU politics. He is on Twitter @pietercleppe.