101 COMMENTARY Launched by the European Commission in 2019, the European Green Deal is a roadmap to Europe becoming carbon neutral by 2050. Building on international agreements like the Paris Climate Agreement, UN Sustainable Development Goals and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, it is designed to achieve behavioural change for sustainability. The EU Green Deal marked the first time these voluntary agreements were systematically translated into law. The European Union’s Taxonomy Regulation and European Sustainability Reporting Standards, as part of the Corporate Sustainability Reporting Directive, define meticulously what is considered sustainable in Europe. This simultaneously introduced a common language to communicate about sustainability efforts, improving transparency and comparability. The EU Green Deal describes the absolute minimum to achieve, focusing on balancing economic growth within planetary boundaries whilst respecting social values. Intrinsically, we are looking at a different economic system than the one we’ve been operating in for more than a century. To achieve its objectives, the European Commission handed the financial sector and civil society instruments to exert pressure on undertakings alongside regulators. As a result, maintaining current linear business models, based on free market mechanisms, is increasingly disincentivised, by making it costly. Integrating environmental, social and governance (ESG) practices is therefore not a ‘nice to have’. In Europe, it is your license to operate. Inspired by the push from the FuelEU Maritime Regulation, the cruise industry has effectively anticipated fuel consumption innovations and is integrating onshore power supply. But that only allows decarbonisation to a certain extent. Apart from emissions, the EU Green Deal equally focuses on resources and due diligence (see diagram on next page). Even though designers are highly conscious and motivated to design more sustainably, their reality is having to work on tight budgets and deadlines. The EU Green Deal context, however, is shifting their With the European Green Deal being implemented at light speed, it can be difficult to keep pace while maintaining healthy profitability. Designers and architects hold the key to compliance, while good ESG practices can provide access to markets and liquidity SIU LIE TAN Siu Lie Tan helps organisations navigate the European Green Deal for resilience and competitive advantage. She advises independently and in partnership with various consultancies, including Exsulting.com (integrated sustainability), Innoboost. nl (business model innovations) and pyramide.nl (leadership training) Sustainability as a growth strategy ACCESS TO LIQUIDITY Banks, investors and insurers need to align their portfolios with the Taxonomy Regulation and the objectives of the Paris Climate Agreement, and comply to the Sustainable Finance Disclosure Regulation. They de-risk their portfolios and avoid stranded assets through selecting companies that allocate green capital expenditures whilst following a decarbonisation path. For cruise operators, this can be a ticket to affordable European liquidity.
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