The context. The objectives of mitigating global warming and decarbonising the economy have become the driving force behind a new industrial revolution based on clean energy, triggering a profound transformation of production systems and a gradual reconfiguration of the global competitive context which can no longer be reversed. With the Green Deal, Europe has assumed a position of international leadership in shaping policies to limit greenhouse gases, but it has struggled to keep pace in terms of growth and productivity. Recent initiatives by the new European Commission have reaffirmed the Union’s strategic commitment to emission reduction targets and developed a more focused strategy on decarbonisation and restoring competitiveness – two objectives which are mutually reinforcing.

Prospects for industry. Two major reports commissioned by the European Commission and published in 2024 have addressed the key challenges the EU must tackle to close the competitiveness gap: the Letta Report, dedicated to the completion of the European Single Market, and the Draghi Report, dedicated to the EU’s competitiveness within the new global geopolitical landscape. The Commission recently endorsed and substantiated the vision set out in these reports through the Competitive Compassand the Clean Industrial Deal, with the aim to support the development of green technologies and the transformation of energy-intensive processes by means of a strategic and regulatory framework of reference for investment and innovative business initiatives. In this era of profound change, many businesses have already identified in this new framework a horizon of opportunities and positioned themselves to take full advantage of it.

Prospects for finance. The vast scale of investment required for the transition will need financial support, including substantial contributions from private finance. In this context, the European Green Deal has focused primarily on transparency regulations for larger businesses (CSRD, SFDR) to enable investors and financial intermediaries to factor physical and transition-related climate risks into their risk/return assessments.These considerations have now become a permanent feature of prudential supervisory regulations, requiring businesses to demonstrate that they are not exposed to climate risks in order to access financing. The European Commission’s recent initiatives to simplify corporate climate reporting (Omnibus package) do not fundamentally change this scenario: EU financial market players have confirmed that corporate reporting on climate and decarbonisation is no longer a mere regulatory compliance burden, but a pressing business necessity, essential for securing better access to credit and financial markets. Therefore, it is crucial to maintain the integrity of the regulatory architecture as a whole, without reducing its ambitions and avoiding deregulation that may create some room for greenwashing.

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