Why EU cuts in red tape could hamper environmental ambitions

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Good morning, and thanks for reading.

Today, our competition correspondent reveals how a push to cut (green?) red tape is great news for oil companies, and our Madrid bureau chief explains why trains in Spain aren’t mostly flat.

Have a nice long weekend, see you on Tuesday.

Green ribbon

Some EU officials fear a push to cut red tape could let companies off the hook in their efforts to meet the Paris climate goals.

The new draft rules seen by the Financial Times would make reporting of climate impacts voluntary rather than mandatory for EU companies, writes Alice Hancock.

Context: this year, an update of the block’s corporate reporting standards entry into force, increasing the number of companies covered by the rules. It stipulates that businesses must report to a set of standards, which will be set out in further legislation this year.

Under the draft of that legislation, companies won’t have to disclose efforts to align with the Paris climate accord unless the company deems them “material” to its business.

A specialist advisory group, EFRAG, had advised making the reporting of climate impacts mandatory, while others, such as working conditions, could be reported on the basis of an assessment of their importance made by the company itself.

But the European Commission appears to have ignored that advice and wants to subject all areas, including climate, to a “materiality assessment”.

The change has raised concern among environmentally conscious officials. They argue that it will be more difficult to monitor the effect of business activities on the climate. Financial institutions would also have a harder time keeping tabs on companies in which they invest on their own financial report.

It also means companies can set their own terms when it comes to decarbonisation, an EU official said, as seen at the ExxonMobil Annual Meeting last week.

The move is part of a broader effort by Brussels to cut red tape, following commission chair Ursula von der Leyen promised to reduce reporting obligations for one-quarter businesses.

A document released this week by Denmark and Estonia showed that there was support among member states for the anti-bureaucracy push.

But ironically, the changes mean that jobs for companies may not actually decrease. An executive at a major multinational company said that while there may be fewer actual reports, “it will still take the same amount of work because we have to do the assessment for everyone.”

The commission declined to comment on the change. He said the standards “will be published for public consultation as soon as possible”.

Chart du jour: recession after all

The German economy contracted by 0.3 percent in the first three months of this year, performing worse than the initial estimate of zero growth. The second consecutive quarter of contraction in gross domestic product means Europe’s largest economy is officially in recession.

Derailed

Spain’s sunny coastal cities like Barcelona, ​​Valencia or Málaga are perfect for a great vacation. But have you been to more than one of them on the same trip? Think twice before you try, writes Barney Jopson.

Context: Spain has one of the best high-speed train networks in Europe, but most of the train lines emerge as spokes from the capital Madrid. While the Mediterranean is central to tourists, industry and agriculture, there is no fast rail link between its cities.

This is a huge source of frustration for regional politicians who are in the spotlight before regional and local ones elections on Sunday.

In Valencia, which is preparing to be the most closely contested race, on one point the candidates agree on the need to build a “Mediterranean corridor”. A plan for a line in France it has been around for yearsbut progress has been extremely slow.

Ximo Puig, the regional president at the head of a socialist-led coalition, blamed “the problem of Spanish centralism” on the lack of a high-speed connection.

“Madrid is like a vacuum that sucks resources,” he told the FT. “Everything must go through the centre, when the Mediterranean corridor produces more than 50% of all Spanish exports”.

The issue reminds us that the devolution inserted in the post-Franco constitution has left many things that only the central government decides. Fragments of a Mediterranean corridor have been built, but delays are the order of the day.

For now, the best transportation option for goods ranging from cars to avocados is road or sea. “It’s absurd,” Puig said.

Puig’s opponent, Carlos Mazón of the Conservative People’s Party, said the railway line “is an infrastructure of absolute priority”.

What to watch today

1. German Chancellor Olaf Scholz meet leaders of Estonia, Lithuania and Latvia in Tallinn.

2. European Parliament President Roberta Metsola visits government officials In Austria.

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