The latest insights from the We Mean Business coalition

What recent political developments in the EU mean for business climate action

With the launch of the EU’s Strategic Agenda for the 2024-2029 period, we look at the recent election results and why green economic growth and industrial competitiveness hinges upon the clean energy transition.  

Europe is at a pivotal moment. Elections in early June saw Ursula Von de Leyen’s centre-right European People’s Party winning a majority of 188 seats, followed by the European Socialists (S&D) with 136 seats. As the results came in, there was evidence of a clear shift to the right, with historically fringe far-right parties also gaining votes from French, German, Italian, Hungarian, and Spanish voters.

The EU Strategic Agenda    

In response to the European Parliamentary elections, EU leaders met in late June to set the EU’s Strategic Agenda for the 2024-2029 period and to confirm the top jobs for the EU’s three major institutions for the next five years. The We Mean Business Coalition board signed a joint statement to EU leaders before the Summit, urging them to ensure policy remains focused on competitiveness, industry, energy security and resilience as strategic priorities.   

The Agenda for the EU Institutions announced at the end of the Summit ‘missed the mark’ with a lack of explicit mention of the Green Deal. However, it does outline the bloc’s intentions to lead in the next great industrial revolution, stating, “We will strengthen our competitiveness and become the first climate-neutral continent, making a success of the climate and digital transitions, leaving no one behind.” 

With China and the US investing heavily in clean energy that supports business growth, job creation and economic security, EU leaders also committed to maintain its position as a global leader on climate. Speaking to this topic, the Agenda states, “Trusting our companies to turn risks into opportunities will spur investment, boost economic growth and make Europe a world leader in green and digital industries and technologies.” 

 The Agenda further outlines an intention “to create the stable and predictable framework and create a more supportive environment for scaling up Europe’s manufacturing capacity for net-zero technologies and products.” 

In a move that will shore-up stability, current European Commission President Ursula von der Leyen secured a second term. Meanwhile, former Portuguese Socialist Prime Minister Antonio Costa will become European Council President and Estonian Liberal Prime Minister Kaja Kallas will be the EU’s new foreign policy chief.  

The bloc now waits for the final results of both a snap general election in its second-largest economy, France, and an upcoming election in the UK, which remains one of the EU’s biggest trading partners and where polls suggest a change in political leadership for the first time in 14 years. 

Why clean energy lies at the heart of a competitive EU 

Irrespective of political stance, economic competitiveness remains a critical priority for EU policymakers. The impacts of the climate crisis are now being acutely felt across member states. To remain thriving economies must prioritize a shift away from the leading cause of emissions: burning fossil fuels.  

In May alone, severe flooding hit northern Italy, France, and Germany while southern Italy blistered in unseasonable heatwaves. In recent days, there have been further reports of deadly flooding in France, Italy and Switzerland. As the crisis hits closer to home, the urgent need for rapid decarbonization coupled with a just economic transition is inescapable.   

According to a recently launched UNDP survey, in some of Europe’s biggest economies over 90% of people surveyed want countries to set aside disagreements and work together to address climate change.  Given this clear signal, the challenge for incoming European policymakers will be working together to ensure that key pieces of European legislation, designed to ensure economic stability and protect lives and livelihoods, such as the EU Green Deal and the Fit for 55 package, stay at the top of the political agenda. 

Together with CLG Europe, we published a report for policymakers on how to build on a sustainable, competitive and resilient EU with recommendations on how to build on the legacy of the Green Deal and ensure the bloc’s competitiveness for the next political cycle. The research proposes four ‘deals’ covering the green industrial transition for the world’s largest trading block as well as the economic, social, and political transformation needed.  

European businesses are speaking up 

Unwavering support from business serves to embolden policymakers as they continue their path towards resilience and climate neutrality. Recently more than 100 business leaders called on the EU to agree a robust 2040 climate target of at least 90% emissions reductions, and to deliver plans and policies that will scale the investment needed for a just and rapid decarbonization of their economies. And more than 260 businesses, many of them based in or operating in the EU, have already signed up to our Fossil to Clean campaign. 

Meanwhile in May, climate change think-tank E3G coordinated a letter from a 100+ member-strong coalition of civil society, businesses, cities and regions to EU leaders, calling for a socially fair and green climate transition in to be prioritized the EU’s Strategic Agenda.  

On many fronts, business is already leading the green transition. Recent news shows that Spain green’s energy can now exceed demand, prompting Prime Minister Sánchez to set a target of making 34% of the economy reliant on electricity by 2030 to drive demand. This supply is thanks in part to Spanish renewable energy firm Iberdrola, which has installed more than 1,750 MW of renewable energy in Spain in 2023 alone, meaning it now has 21,708 MW of capacity. In 2022, Iberdrola created €12.7 billion towards Spain’s GDP and generated 400,000 jobs.  

By working together with ambitious business, EU policymakers can drive competitiveness and economic growth EU policymakers will need to work with ambitious businesses as the Agenda outlines, “to create the stable and predictable framework and create a more supportive environment for scaling up Europe’s manufacturing capacity for net-zero technologies and products.” More than 260 businesses, many of them based in or operating in the EU, have already signed up to our Fossil to Clean campaign.

EU policymakers will need to seize the opportunity to deliver transformation towards a climate neutral and prosperous EU at scale and speed. Later is too late.