Commission calls for businesses to self-regulate on environmental issues

A Communication adopted by the European Commission will enable businesses to reach agreements on environmental regulation through self- or co-regulatory mechanisms. The Communication aims to help companies develop environmental solutions more quickly and effectively.

“The environment is an area where self-regulation and co-regulation can deliver important benefits in complementing the instruments which we already have at our disposal,” declared Environment Commissioner Margot Wallström. “The Commission wants to encourage business to engage in environmental agreements at Community level, not least in new areas where the institutions have not yet legislated or the Commission has not expressed its intention to legislate.”

The Communication, based on the recently adopted Action Plan on the Simplification and Improvement of the Regulatory Environment, retains the right of the European Commission, Council and Parliament to initiate and legislate, establish objectives and oversee implementation. In the case of co-regulation, environmental agreements would be formalised in a legislative act. The co-legislators – the Council and European Parliament – would establish the environmental objective, a deadline and monitoring requirements.

But the Communication also advocates a shift towards companies setting their own objectives, offering “the prospect of tailor-made solutions for the faster achievement of environmental benefits.” Under self-regulation an agreement could be recognised by an exchange of letters or by a Commission Recommendation.

The Recommendation could be backed by a Decision of the European Parliament and the Council establishing an appropriate monitoring system. The Commission used this mechanism to acknowledge the commitments of the European, Korean and Japanese carmakers on the reduction of CO2 emissions from passenger cars (see related story).

“The Commission is keen to welcome spontaneous agreements where industry takes the initiative,” Wallström continued. “In many cases, no Community action will be needed for these agreements. Where we have already expressed an intention to legislate, however, we must ensure that the co-legislators have the opportunity to express an opinion on the Commission’s analysis of a proposed environmental agreement.”

Recently, the European Commission rejected pressure from the European Parliament for compulsory reporting on corporate social responsibility issues (see related story), although some MEPs had been opposed to such a move (see related story). Instead, the Commission called for a voluntary code of practice (see related story).

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