Our ESG Tax and Legal team recognizes that environmental, social, and governance (ESG) factors are redefining the fundamentals of compliance and corporate governance. It's not merely about complying with regulations, it's about setting new standards in sustainability and transparency. Investors, consumers and regulators are increasingly demanding that sustainability be ingrained in a company’s business practices, thus influencing every decision and strategy.
Our team focuses on the intricate weave of tax and legal practices that support sustainable business operations. From green taxation to environmental and climate regulation to sustainable supply chain analysis, our expertise spans a broad spectrum designed to guide businesses through the complexities of ESG compliance.
Key ESG legislation and regulations in Europe
The EU Green Deal
In December 2019, the European Commission presented the European Green Deal, a strategy to transition the EU economy to an environmentally sustainable economic model, achieving net zero greenhouse gas emissions (or ‘climate neutrality’) by 2050.
The FitFor55 Package
To achieve a 55% reduction in greenhouse gas emissions by 2030, the EU has introduced a comprehensive package of measures designed to revamp carbon pricing (ETS, CBAM) and environmental taxation (Energy Taxation, Plastic Tax) across Europe.
A shift from optional to unavoidable
The surge in regulations aimed at environmental protection introduces new challenges and costs. The EU Green Deal intensifies these dynamics with its comprehensive environmental taxes, carbon footprinting requirements, and stringent sustainability standards. These developments are reshaping the business landscape, compelling companies to innovate or face growing pressures, both operational and financial. The aim of the EU Green Deal is to steer corporate behavior toward more sustainable practices, ushering a shift from optional to unavoidable in the new ESG regulatory landscape.
Our approach goes beyond compliance. With our FitFor55 Assessment, we proactively analyse the impact of green taxes and evolving legal standards to help companies maintain their competitive edge. By assessing the potential impacts on profit margins and operational efficiency, we enable businesses to transform these challenges into opportunities for growth and innovation.
ESG Regulatory Landscape and Service Offering
As environmental regulations and green taxes evolve, PwC Belgium’s ESG Tax and Legal team is here to help. We offer clear insights and practical solutions to help your business navigate these changes and even and benefit from them, ensuring you thrive in a sustainability-focused future. Join us as we unveil some of the services aimed at addressing this dynamic regulatory environment.
- Carbon Border Adjustment Mechanism (CBAM)
- EU Deforestation Regulation
- EU ETS 2
- Extended Producer Responsibility
- Battery Regulation
- ESG Incentives
- Tax Transparency
Carbon Border Adjustment Mechanism (CBAM)
CBAM imposes a charge on the embedded carbon emissions of certain imports (iron & steel, cement, fertilisers, aluminium, electricity and hydrogen), which is equal to the carbon price imposed on domestic goods under the EU Emission Trading System (ETS).
EU Deforestation Regulation
The EUDR mandates that commodities and products can only enter the EU market if they are deforestation-free, comply with the production country's laws, and have a due diligence statement certifying EUDR compliance. Companies have until the end of 2024 to meet these criteria, with extended deadlines for SMEs.
EU ETS 2
EU ETS 2 will come in effect in 2025. It will target emissions from the road and building sector by taxing the placement on the market of fossil fuels. To comply with the new rules, fuel traders and tax warehouses will need to fill a registration application to the national GHG Registry and prepare an emissions monitoring plan.
Extended Producer Responsibility
Extended Producer Responsibility (EPR) has supported the shift towards a circular economy by requiring companies to undertake both financial responsibility and active participation in waste management processes. New Green Deal rules such as the Packaging and Packaging Waste Regulation (PPWR), the Single Use Plastic Directive (SUP), and the Waste Framework Directive have introduced stricter EPR obligations for EU companies.
Battery Regulation
The EU Battery Regulation mandates that manufacturers conduct a conformity assessment to ensure batteries meet performance, durability, and labeling standards. Additionally, companies placing batteries on the EU market must perform comprehensive ESG supply chain due diligence, manage end-of-life battery waste, and implement a Battery Passport.
ESG Incentives
The EU, national and regional governments provide a large variety of measures to financially support and strengthen the economy and businesses. Research and development, innovation, investments and sustainability are all examples of activities that can be eligible for financial support. There are numerous opportunities available for all kinds of sectors, companies and activities. PwC can support your company in reducing your costs and optimising profits by maximising your chances to obtain the necessary incentives for your future projects.
Tax Transparency
Tax transparency initiatives mandate that companies disclose financial and tax details to enhance accountability and prevent tax evasion. Supported by regulations like the EU's Country-by-Country Reporting Directive, these measures promote fair tax practices and enable stakeholders to understand corporate tax strategies.
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