CSRD: Why is sustainability in Europe now essential and promising?

Despite some current trends, sustainability in Europe should not weaken. On the contrary, it should continue to strengthen, establishing itself as an essential strategic priority for the continent's economic future and competitiveness.

While major American financial players are withdrawing from some initiatives aimed at "greening finance," Europe continues to assert itself as a pillar of green finance. Recently, BlackRock, the world's largest asset manager, representing 57.5 trillion dollars in assets, announced its withdrawal from the Net Zero Asset Managers Initiative (NZAM). This withdrawal is part of a trend where several major Wall Street banks have also exited similar commitments. In contrast, the much more robust and structured European regulation plays a central role in the sustainable transformation of the financial sector.

Since the New Green Deal launched in 2019, the European Union has stood out with an ambitious and structured regulation on sustainability. The CSRD directive, adopted in 2022, imposes greater transparency on companies, obliging them to publish their environmental and social impacts. This commitment helps structure markets and promote effective collective action.

Among the ongoing discussions, the Omnibus bill proposal supported by Germany suggests raising the CSRD's applicability thresholds to 450 million euros in revenue and 1,000 employees, thus refocusing its application on major economic players without undermining its overall objective.

However, for this refocusing to be adopted, it would require the approval of the main European bodies: the European Commission, the European Parliament, and the Council of the European Union. Each member state would then need to integrate these changes into their national law, a long and complex process. In the short and medium term, European companies will continue to apply the CSRD in its current form.

This regulatory dynamic is accompanied by a rapid expansion of the global market for sustainable innovations. According to Allied Market Research (2023), this market is expected to reach 417 billion dollars by 2030, with an annual growth rate of 21.9%. For European companies, this evolution represents a unique opportunity to reconcile innovation with climate goals.

Furthermore, the European Union plans to invest 1,000 billion euros by 2030 to achieve its climate goals (European Commission). These efforts illustrate Europe’s commitment to a sustainable and structured transition, while raising questions about the competitiveness of companies in the face of these new requirements. It is in this context that the CSRD positions itself as an essential strategic lever.

The CSRD directive goes beyond mere regulatory framework: it is a key strategic lever to enhance the competitiveness of European companies. By introducing common standards across the continent, it establishes fair conditions and fosters innovation.

Globally, the rise of sustainable innovation is accompanied by encouraging economic projections. For example, the circular economy could generate an estimated contribution of 4,500 billion dollars by 2030 (Circle Economy, 2023), while investments in renewable energies — particularly in wind, solar, and green hydrogen — are expected to reach 4,000 billion dollars during the same period (IEA, 2023).

The support of major corporations is also crucial in this transition. The Sustainable Development Directors’ College (C3D), which brings together more than 380 French executives, actively supports the implementation of the CSRD. Fabrice Bonnifet, president of C3D, highlights in an article in Les Echos: "Sustainability regulations not only ensure fair competition conditions but also reinforce European economic sovereignty."

However, one question remains: what will be the repercussions for those who do not engage in this essential transition?

Ignoring climate issues is not cost-saving, it is a colossal financial risk. Studies show that companies could lose up to 25% of their profits due to disruptions related to climate change (Boston Consulting Group, 2023). In 2006, the British Stern report, which was the first to study the economic impact of climate change effects, already estimated the cost of inaction to be higher than the cost of prevention.

Recent natural disasters clearly illustrate these costs. The fires in Los Angeles, with losses estimated at 150 billion dollars, are a reminder that environmental impacts are primarily economic realities. These increasingly frequent extreme events highlight the urgency of acting to protect citizens, businesses, and infrastructure.

In Europe, anticipating climate risks has become a strategic issue. Investments in sustainability are no longer seen as a burden, but rather as an opportunity to create long-term value, strengthening the resilience of local and national economies.

And it is precisely this long-term vision that allows Europe to establish itself as a global leader in sustainability.

Europe plays a leading role. Its ambitious regulations position the continent as an essential benchmark in sustainable finance and ecological transition. Sustainability in Europe is not just a simple trend: it is a strategic response to global challenges while paving the way for a prosperous economic future. One thing is certain: the necessity of transitioning to a more sustainable economy is proven, but it offers unprecedented opportunities for the future of our continent.