4-2. The European Green Deal and Corporate EHS Compliance Strategies

The European Green Deal, an overarching policy championed by the European Union (EU), aims to achieve carbon neutrality by 2050 and create a sustainable society. This initiative goes beyond just climate change countermeasures, encompassing a wide range of areas such as industrial transformation, circular economy, environmental protection, and respect for human rights and labor. It has a significant impact on the EHS (Environment, Health, and Safety) responses of companies. Japanese companies must adopt strategic measures based on this policy if they wish to enter the European market or conduct business with European firms.

1. Key Measures of the European Green Deal

The pillars of the Green Deal include mandatory carbon neutrality based on the "Climate Law," resource efficiency through the "Circular Economy Action Plan," and reduction of air, water, and soil pollution via the "Zero Pollution Action Plan." It also includes promoting energy efficiency in buildings, regulating sustainable finance, and strengthening corporate disclosure obligations. These measures are directly linked to EHS activities across a wide range of sectors, from manufacturing to energy and logistics.

2. Impact from an EHS Perspective

For EHS professionals, key areas to watch are the strengthening of chemical substance regulations (REACH regulation revision), waste reduction, mandatory use of recycled resources, and prevention of health damage to workers. For example, designing products with a high environmental load or improperly managing chemical substances could lead to sales bans or penalties in Europe. From an occupational health and safety standpoint, there is also a demand for human rights due diligence and ensuring a safe working environment throughout the entire supply chain.

3. Challenges for Japanese Companies

Japanese companies exporting to Europe must disclose their CO2 emissions and recycling efforts throughout the entire product lifecycle. They are also being pressed to comply with non-financial information disclosure (CSRD: Corporate Sustainability Reporting Directive), and the collection and disclosure of EHS data will be critical for international competitiveness. Since the Green Deal also applies to business partners, Japanese companies will be affected by "indirect regulations."

4. Strategic Responses

• Develop a decarbonization plan: Introduce renewable energy, invest in energy-saving equipment, and disclose carbon footprints.

• Review product design: Promote the use of recyclable materials and substitutes for hazardous substances.

• Enhance information disclosure systems: Prepare integrated reports compliant with GRI, SASB, and ISSB standards.

• Supply chain management: Build a system to ensure compliance with EHS standards, including for partner companies.

Summary

The European Green Deal is not merely a matter of regulatory compliance; it is a business issue that can determine a company's competitive advantage. By viewing EHS compliance as an "investment" rather than a "cost" and by holistically promoting decarbonization, a circular economy, and occupational health and safety, companies can achieve sustainable growth and establish global competitiveness in the European market.