The EU Commission has launched the Competitiveness Compass
The Competitiveness Compass is an ambitious initiative aimed at strengthening Europe’s economy and reducing dependence on third countries. With a promised “unprecedented” simplification of rules and fewer reporting requirements for companies, we are facing a significant change. ESG365 sees great opportunities, but warns against compromising on climate responsibility and the work to create good jobs.
On 29 January, the European Commission published the Competitiveness Compass, which aims to strengthen Europe’s competitiveness. The initiative is based on the so-called Draghi Report, prepared by Mario Draghi, former President of the European Central Bank (ECB). The report, published in September 2024, calls for swift action to improve Europe’s competitiveness. Without action, according to Draghi, the future looks bleak for Europe.
Competitiveness Compass promises unprecedented regulatory simplification
With this new initiative, European Commission President Ursula von der Leyen is promising an “unprecedented” simplification of regulations. When she presented the initiative on Wednesday, she emphasised that Europe’s economy has been too dependent on countries such as China, Russia and the United States. As a result, Europe is now lagging behind. The focus is therefore on strengthening competitiveness, productivity and innovation by removing structural weaknesses and long-standing barriers. Read more about the initiative here.
As part of the initiative, the reporting burden on companies will be reduced. Large companies will see a 25% reduction in requirements, while small and medium-sized enterprises will see a reduction of at least 35%. The exact changes are not yet known, but reporting requirements will be significantly relaxed. However, Von der Leyen emphasised that the EU remains committed to its goal of climate neutrality by 2050.
ESG365: Keep the focus on ESG
At ESG365, the initiative is seen as a positive step – provided that the focus on climate and working conditions is maintained. “It’s good to make everything simpler and more relevant. The important thing is that we stick to a common frame of reference for what we measure,” says Per Ørum, CEO and founder of ESG365. He adds: “We must continue to work for good workplaces and to tackle the climate challenge. We must not compromise on the EU’s goal of climate neutrality by 2050. There must be balance when deregulating.”
According to Per Ørum, ESG also strengthens competitiveness. When companies integrate sustainability and responsibility, they strengthen their relationships with investors, customers and partners. At the same time, efficient resource utilisation can lead to savings. ESG reporting provides better insight into the company’s risks and opportunities – and thus a stronger foundation for growth.
If you need help getting started with your ESG rapport, ESG365 can help you.
Article by Victoria Ørum, Communications Manager, ESG365.