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Climate neutral and circular transition – developing policies and instruments for business practice

Research project

Active research

Project period

2023 - ongoing

Project owner

Department of Business Administration,

Financier

Vinnova

Area

Sustainability and environment Society and economy

Topic

SOCIAL SCIENCES Business Administration

Short description

The project focuses on investigating and analysing how a large industrial company adapts in real time to the EU's new sustainability regulation CSRD. The regulation, which is in line with the EU Green Deal agenda, aims to accelerate the transition towards climate neutrality and circularity.
The adaptation of the company represents a unique opportunity to study in detail how an important EU regulation is put into practice, with great potential for knowledge dissemination effects that are fourfold: 1) To provide feedback to ongoing norm development in Swedish regulation; 2) To spread knowledge to similar industrial companies; 3) To publish scientific results; and 4) To create a useful 'Case' for educational purposes.

Background

The development and implementation of environmental policies and regulations have become increasingly important in society to assist industrial and climate transitions, as well as to promote a shift towards a circular economy.

In January 2023, the new EU directive for corporate sustainability reporting, the Corporate Sustainability Reporting Directive (CSRD), was introduced as a step to increase transparency regarding companies' sustainability efforts. The directive is part of the implementation of the European Green Deal agenda for 2050, leading to the introduction of new national laws related to sustainability reporting in EU countries.

In addition to the CSRD, which primarily defines what should be reported, the EU has been working this year on the introduction of new standards for sustainability reporting, the European Sustainability Reporting Standards (ESRS), to clarify how reporting should be done and where the focus should lie.

Beyond reporting on environmental and social factors, the standards require transparency regarding companies' reporting on governance issues (e.g., management and supervisory bodies, internal controls, risk management systems) so that various stakeholders can better understand companies' sustainability efforts.

The hope with EU regulation is that increased transparency requirements will change companies' behaviors and practices in various industries. These requirements are expected to lead to a faster transformation of companies' business models, policies, and control tools to quickly achieve climate neutrality and promote circular business activities. The regulation is a transition that aligns with the EU's Green Deal agenda to achieve a more sustainable future.

Purpose and Objectives

The purpose of the project is to investigate and analyze how companies develop policies, structures, and control mechanisms for climate-neutral and circular transition, as well as how they adapt to the new sustainability regulations to drive the sustainability agenda and achieve positive change in line with the EU Green Deal agenda.

The goal of the project is to create a roadmap that identifies opportunities, obstacles, and potential goal conflicts that arise during the transition process, both at the strategic and operational levels where new policies and control mechanisms are developed.

Expected Effects and Results

The project aims to investigate how sustainability regulation is translated into practice, with significant potential for knowledge dissemination effects that are fourfold: 1) Providing feedback to ongoing norm development in Swedish regulation; 2) Disseminating knowledge to other industrial companies; 3) Publishing scientific results; and 4) Creating a useful 'Case' for educational purposes.