Industry and environment

The European Union has developed a strategy for integrating environmental issues into enterprise policy as well as measures aimed at limiting the negative impact businesses have on the environment, while at the same time not hampering their development.

ACT

Conclusions of the Council of 14 and 15 May 2001 on "A strategy for integrating sustainable development in the European Union's enterprise policy" for the Gothenburg European Council.

Conclusions of the Council of 6 and 7 June 2002 on enterprise policy and sustainable development.

SUMMARY

The activities carried out by businesses can exert considerable pressure on the environment. European legislation lays down rules aimed at preventing pollution and repairing the damage companies cause to the environment. It also contains measures aimed at promoting the development of environmentally friendly industrial activities.

The European Union's objective is to separate the economic development of businesses from the environmental damage that their activities cause, by ensuring a high level of environmental protection without compromising business competitiveness.

Preventing pollution and repairing damage to the environment

Article 174 of the Treaty establishing the European Community (EC Treaty) sets out the basic principles of Community action on the environment, in particular the precautionary principle and the polluter pays principle. These general principles are implemented by specific legislation applicable to industrial activities in Europe.

Under Article 6 of the EC Treaty environmental protection requirements must be integrated into Community policies, in particular with a view to promoting sustainable development.

By adopting the strategy for sustainable development at the Gothenburg European Council in 2001, the EU made the simultaneous pursuit of environmental objectives and the integration of the environment into economic and social objectives one of its priorities.

European legislation on the environment sets limits on the amount of polluting substances discharged by industry into the air or water.

In order to prevent or minimise pollutants being released into the air, water and soil as well as waste, in particular from industrial plants, the IPPC Directive also establishes a procedure for authorising activities with a high pollution potential and sets minimum requirements to be included in all permits, particularly in terms of pollutants released.

In addition, the EIA Directive requires an environmental impact assessment to be carried out on certain public and private projects before they can be approved. This is the case in particular for projects involving dangerous industrial plants such as oil refineries or chemical facilities.

The environmental liability of companies is covered specifically in Directive 2004/35/EC, with a view to preventing and repairing damage to the environment. This liability regime applies to some explicitly listed occupational activities as well as other occupational activities when the operator is guilty of error or negligence.

Companies whose activities involve hazardous substances are also subject to certain specific obligations in order to prevent accidents and limit their consequences.

European legislation also sets out detailed rules for the management of waste produced by businesses, both for "traditional" waste (recycling, landfill, incineration, etc.) and for certain specific types of waste (radioactive substances and waste, plastics, waste resulting from certain industrial activities).

Waste management is increasingly seen as a stage in the life cycle of resources and products. Thematic strategies on preventing and recycling waste and on the sustainable use of natural resources adopted in 2005 focus mainly on the ways of promoting more sustainable waste management, reducing the amount of waste produced, minimising the environmental impact of waste and reducing the use of resources. This global, life cycle-based approach obliges businesses to manage their resources and products in a more sustainable way.

Promoting environmentally-friendly activities

The Council stated in its conclusions of May 2001 that an effective strategy for integrating sustainable development into industrial policy cannot be based on legislation alone, but that a large part of this work must be stem from market-based and voluntary approaches. It reiterated that integrating sustainable development is a challenge, but at the same time an opportunity to stimulate innovation and create new economic prospects and a competitive advantage for European businesses.

The EU has instruments that favour the development of environmentally friendly economic activities. The aim is to boost the competitiveness of businesses that meet environmental standards or help improve the environment. These instruments include incentives and measures aimed at facilitating business activities.

Among these incentives, the EU offers businesses numerous funding possibilities in the form of co-financing or loans through various financial instruments and programmes, such as LIFE or the successive research and technical development framework programmes, or through other financial institutions such as the European Investment Bank (EIB) or the European Structural Funds.

Other incentives focus on improving businesses' visibility and image. The main examples are the Ecolabel, the Community Eco-Management and Audit Scheme (EMAS) and certain one-off events such as the European Business Awards for the Environment.

European action also aims to facilitate businesses' activities, in particular by spreading best practice resulting from instruments such as the IPPC Directive on integrated pollution prevention and control, integrated product policy, European standardisation, or the Best project. The integrated product policy is the main policy for promoting sustainable production and consumption. The Commission and the national and local public authorities must act as catalysts by fostering dialogue and coordinating the spread of knowledge and best practices.

The EU has also developed instruments to improve the regulatory and management frameworks in which businesses develop. These include the action plan in favour of ecotechnologies, the EMAS system and the promotion of voluntary agreements between businesses.

Voluntary initiatives taken by businesses as part of corporate social responsibility (CSR) practices play an important role in integrating social and environmental concerns into business strategies and action. These initiatives demonstrate the business sector's commitment to sustainable development, innovation and competitiveness.

Background

The Vienna European Council (December 1998) asked the Industry Council to define a strategy aimed at integrating environmental issues and sustainable development into enterprise policy.

The Cardiff European Council (June 1998) laid the foundations for coordinated action at Community level to integrate environmental requirements into the Union's policies.

The Sixth Environment Action Programme, adopted in September 2002, reaffirmed the importance of the principle of integration and laid the foundations needed to create the horizontal thematic strategies which required by the various economic and political actors.

RELATED ACTS

Commission working document of 1 June 2004 - Integrating environmental considerations into other policy areas - a stocktaking of the Cardiff process [COM(2004) 394 final - Official Journal C 49 of 26.02.2006]. In this document the Commission stresses the substantial positive achievements made as a result of measures to integrate environmental considerations into industrial activities. These measures have contributed to an overall reduction of carbon dioxide produced by European industries. They have also made it possible to break the link between industrial activities and emissions of atmospheric pollutants (acidifying gas and ozone precursors in particular), and to some extent between energy production and the use of raw materials. However, despite this progress the Commission indicates that industrial production processes still account for a considerable share of all pollution in Europe. Industry generates 21% of EU greenhouse gas emissions and is a major source of pollution (such as heavy metals, volatile organic compounds, nutrients, etc.).

Communication from the Commission of 11 December 2002 on industrial policy in an enlarged Europe [COM(2002) 714 final - Not published in the Official Journal].

Communication from the Commission of 15 May 2001 - A Sustainable Europe for a Better World: A European Union Strategy for Sustainable Development (Commission's proposal to the Gothenburg European Council) [COM(2001) 264 - Not published in the Official Journal]. The EU has formulated a long-term strategy to dovetail the policies for economically, socially and environmentally sustainable development, its goal being sustainable improvement of the well-being and standard of living of current and future generations. A review of this strategy was launched in 2005.

Council report of 9 November 1999 on the integration of sustainable development in the Union's industrial policy, written for the Helsinki European Council.

In this report the Council points out that the integration of environmental considerations into industrial policy is based on certain essential principles, namely the importance of competitiveness as a key aspect of industrial policy in the three dimensions (economic, social and environmental) of sustainable development, the satisfactory cost/efficiency ratio of policies and business measures, the promotion of voluntary action between parties involved, and the specific features and interests of small and medium-sized enterprises.

Conclusions of the Council of 29 April 1999 on integrating the environment and sustainable development into the industrial policy of the EU.

Last updated: 03.02.2006