The EU is ramping up sustainability legislation. What should business leaders do?

ESG is a challenge – but it’s an opportunity too

Xavier Baeten

By Xavier Baeten

Professor of Reward & Sustainability

06 October 2024

The European Union is leading the way in tackling the climate crisis. And as part of this, it’s setting out new laws and regulations for businesses.

From now on, organisations will have a responsibility to monitor and report on their Environmental, Social and Governance (ESG) practices and impact.

But what will this mean for organisations? And how will they be able to rapidly refocus their strategy and operations through an ESG lens?

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What does sustainability legislation mean for businesses?

There are currently three key pieces of legislation – and there is more on the way. All of it is designed to impel companies to reduce negative impact on the environment and society.

Key pieces of legislation

European Green DealCorporate Sustainability Reporting Directive (CSRD)Corporate Sustainability Due Diligence Directive (CSDDD)

Sets out a commitment to:

  • Achieve Net Zero emissions by 2050
  • Create a more circular economy
  • Leave no person or place behind

Mandates that businesses:

  • Publish sustainability reporting
  • Publicly share details of their impact

Sets out to:

  • Foster sustainable and responsible corporate behaviour
  • Anchor human rights and environmental considerations into corporate operations

More specifically, the new rules oblige European companies to report on their sustainability targets and progress – setting out their environmental and social impact in transparent detail. 

This, of course, is great news for the planet and society. 

Companies will no longer be able to think that they’re ticking the ESG box by popping a half page about volunteering and recycling into their annual report. From now on, they’ll have to methodically track sustainability metrics – and share them with the world.

For some businesses, this may be a daunting prospect. Sustainability affects every discipline, team and activity in a business. It’s multi-faceted, overlapping and challenging.

For many organisations, complying with the legislation will mean fundamentally shifting, re-aligning and re-imagining business models.

ESG is a challenge – but it’s an opportunity too

But, says Bart Vercauteren – Head of ESG at investment firm Ackermans & van Haaren – the new regulatory environment is also an opportunity.

He says: “We see how companies are embracing sustainability as an opportunity to create new strategies, products and business models for long-term value.

“As an investor, we ask, ‘how can you use that legislation to bring your ESG programme to the next level, and how does it align with your corporate strategy?’”

The benefits of companies becoming more sustainable are becoming increasingly clear. However, how do companies transition from having good intentions, to having systematically embedded processes that empower both profit and purpose?

Learning to evolve 

Many companies may have to relearn business to be able to thrive in a world facing climate crisis. And Vlerick’s European Executive MBA (EEMBA) is empowering leaders to do just this.

It covers all the key aspects of business learning – including finance, operations, innovation and technology. But it does it through a uniquely European, sustainability prism.

Participants in the programme take part in immersive learning experiences at leading European hubs. They learn sustainable finance in Paris, sustainable operations and supply chains in Zaragoza, innovation in Dublin – and they discover resilient and purposeful organisations in Copenhagen. And here in Brussels, they delve into European institutions and legislation – and learn how to work within regulations to create competitive advantage.

It's a cutting-edge programme that’s been designed for all business leaders who want to learn how to prioritise purpose and profit.

Indeed, Bart is currently taking part in the EEMBA. He says: “The EEMBA has given me new tools and perspectives that allow me to assess investment opportunities within both a financial and sustainable framework.” 

Learning to design and embed company-wide sustainability strategies

Another hugely important aspect of the EEMBA is the way it empowers participants to drive ESG strategies across companies.

Professor Xavier Baeten teaches an EEMBA class on the role of business in society and sustainability.

He describes how participants learn company-wide approaches to creating sustainability strategy – and driving adoption.

He says: “This is about being able to engage with stakeholders and lead a dialogue. It’s about understanding which frameworks and goals are most relevant to a business. It’s about strategic integration and alignment.”

All of this is taught and experienced on the EEMBA – which also gives participants an opportunity to carry out a supported consultancy project for their own company or a not-for-profit organisation.

Prof Baeten adds: “The EU reporting standards are one of the best opportunities we’ve ever had to bring sustainability into the culture of a company. And the EEMBA has been designed to help participants do exactly that.”

Are you ready to learn about sustainability?

Find out more about our European Executive MBA here.

Discover our sustainability programmes.

Want advice on which programme is right for you or your organisation? Call us – we’d love to hear about your ambitions.

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Inge Thienpont

Inge Thienpont

Customer Relationship Manager – European, Executive and Online MBA