Corporate Climate Commitments Amid War and Uncertainty: REPowerEU

Energy price increases triggered by the war in Ukraine have already negatively affected European businesses and consumers. Euro Area inflation has reached heights not seen since 2001, largely caused by soaring energy prices, and business leaders do not expect energy prices to come down anytime soon. 

The Ukraine war will keep energy prices high but will not affect European efforts to reduce emissions. While a few countries are reverting to coal to navigate the immediate energy crisis caused by Russia’s cutting gas supply, they have also reiterated that this is a temporary measure. European business leaders expect to move full steam ahead with their climate commitments and perceive this challenge as an opportunity to accelerate efforts toward reducing emissions and investing in greener solutions. Accelerating decarbonization in core operations and along the value chain can help companies mitigate climate risks and build resilience.  

REPowerEU—the European Commission plan to rapidly reduce dependence on Russian fossil fuels and fast forward the green transition—does not address short-term transition issues. Businesses, especially in the energy-intensive industries that account for 11 percent of Euro Area value added in manufacturing, face an urgent need for action. They need to act now to minimize the impact on operational expenditure as well as accelerate decarbonization plans to mitigate high energy costs in the mid to long term. 

REPowerEU has put energy conservation and behavioral interventions in the spotlight again. Businesses should consider energy efficiency as part of their climate plans. Energy efficiency measures can reduce business energy costs and can contribute toward future-proofing against volatile energy markets. To understand what REPowerEU means for Europe and your business, see REPowerEU: Implications for Corporate Climate Commitments.