EU Competitiveness Compass – ESG takeaways
Published 5 February 2025
Category: Impact and ESG
29 January 2025, the EU Commission published its Competitiveness Compass (the “Compass”) which sets out a compass that will guide the work in the coming five years and lists priority actions to reignite economic dynamics in Europe, according to the communication.
The Compass sets out an approach and a selection of flagship measures:
- Closing the innovation gap.
- A joint roadmap for decarbonisation and competitiveness.
- Reducing excessive dependencies and increasing security.
The abovementioned flagship measures are complemented by action on the following “horizontal enablers”:
- Simplifying the regulatory environment, reducing burden and favouring speed and flexibility.
- Fully exploiting benefits of scale offered by the Single Market by removing barriers.
- Financing through a Savings and Investments Union and a refocused EU budget.
- Promoting skills and quality jobs while ensuring social fairness.
- Better coordinating policies at EU and national level.
ESG related takeaways
As for ESG takeaways, of particular interest is the content in the Compass on the omnibus proposal (which has been described in our previous update). The Compass confirms the target of cutting the administrative burden by at least 25% for all companies and by at least 35% for SMEs. It is also worth noticing that the EU Commission according to the Compass will “stay the course” towards climate neutrality, including through the intermediate 2040 target of 90% which has been defined in connection with the framework to become a decarbonized economy by 2050.
As for the omnibus proposal, the Compass states that the proposal will, among others, “cover a far-reaching simplification in the fields of sustainable finance reporting, sustainability due diligence and taxonomy.” Further, a new definition of small mid-caps will be proposed to ensure proportionate regulation adapted to companies’ size.
The Compass contains a lot of information on what we can expect in the coming years within the three flagship measures. The Compass can be accessed here.
Next step: The Compass sets out the following actions:
Innovation
- Start-up and Scale-up Strategy [Q2 2025]
- 28th regime [Q4 2025 – Q1 2026]
- European Innovation Act [Q4 2025 – Q1 2026]
- European Research Area Act [2026]
- AI Factories Initiative [Q1 2025], Apply AI, AI in Science, and Data Union Strategies [Q3 2025]
- EU Cloud and AI Development Act [Q4 2025 – Q1 2026]
- EU Quantum Strategy [Q2 2025] and a Quantum Act [Q4 2025]
- European Biotech Act and Bioeconomy Strategy [2025-2026]
- Life Sciences Strategy [Q2 2025]
- Advanced Materials Act [2026]
- Space Act [Q2 2025]
- Review of the Horizontal Merger Control Guidelines
- Digital Networks Act [Q4 2025]
Decarbonisation
- Clean Industrial Deal and an Action Plan on Affordable Energy [Q1 2025]
- Industrial Decarbonisation Accelerator Act [Q4 2025]
- Electrification Action Plan and European Grids Package [Q1 2026]
- New State Aid Framework [Q2 2025]
- Steel and metals action plan [2025]
- Chemicals industry package [Q4 2025]
- Strategic dialogue on the future of the European automotive industry and Industrial Action Plan [Q1 2025]
- Sustainable Transport Investment Plan [Q3 2025]
- European Port Strategy and Industrial Maritime Strategy [2025]
- High Speed Rail Plan [2025]
- Carbon Border Adjustment Mechanism Review [2025]
- Circular Economy Act [Q4 2026]
- Vision for Agriculture and Food [Q1 2025]
- Oceans Pact [Q2 2025]
- Amendment of the Climate Law [2025]
Security
- Conclude and implement ambitious trade agreements, Clean Trade and Investment Partnerships
- Trans-Mediterranean Energy and Clean Tech Cooperation initiative [Q4 2025]
- Joint purchasing platform for Critical Raw Minerals [Q2-3 2025]
- Revision of directives on Public Procurement [2026]
- White Paper on the Future of European Defence [Q1 2025]
- Preparedness Union Strategy [Q1 2025]
- Internal Security Strategy [Q1 2025]
- Critical Medicines Act [Q1 2025]
- European Climate Adaptation Plan [2026]
- Water Resilience Strategy [Q2 2025]
Enablers
- Omnibus simplification and definition of small mid-caps [26/2/2025]
- European Business Wallet [2025]
- Single Market Strategy [Q2 2025]
- Revision of the Standardisation Regulation [2026]
- Savings and Investments Union [Q1 2025]
- Next MFF, including Competitiveness Fund and a Competitiveness Coordination Tool [2025]
- Union of Skills [Q1 2025]
- Quality jobs roadmap [Q4 2025]
- Skills Portability Initiative [2026]
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