From Aspirational Storytelling
to Strategic
Justification

Post-pandemic multilateralism. The year 2021 was shaped by post-pandemic recovery and renewed confidence in international cooperation. Governments, investors and businesses were discussing a green recovery, COP26 in Glasgow indicated that climate action would accelerate globally. The underlying assumption was that sustainability was moving with the direction of travel: politically, economically and socially.

The Green Deal becomes policy. The EU began turning the European Green Deal into detailed policy through the Fit for 55 package (July 2021), which linked climate ambition more directly to industrial, energy and transport policy.

War, energy shock and autonomy. Russia's full-scale invasion of Ukraine fundamentally changed the European context. The war, the energy shock and the weaponisation of gas supplies made energy security, supply chains and strategic dependency immediate political and business concerns.

From climate policy to energy sovereignty. In the EU, the Corporate Sustainability Reporting Directive (CSRD) was adopted. The RePowerEU, was presented in May 2022. This explicitly linked climate transition to energy security and strategic autonomy by aiming to phase out Russian fossil fuel imports, accelerate clean energy and reduce energy dependence.

Industrial rivalry and strategic competition. In 2023, geopolitical competition intensified around industrial policy, clean technology and critical raw materials. The US Inflation Reduction Act and China's position in key parts of the clean-tech value chain sharpened European concerns about competitiveness, industrial leakage and strategic dependency.

The policy turns towards industrial resilience. In response, the EU proposed the Net-Zero Industry Act and the Critical Raw Materials Act. Together, these Acts linked sustainability more directly to industrial capacity, clean-tech deployment and reduced strategic dependency. In parallel, the ESRS were adopted as the detailed framework for CSRD reporting.

Chokepoints, energy security and strategic competition. In 2024, the sustainability context was shaped by continued geopolitical instability, supply-chain vulnerability and a more security-focused operating environment. The Red Sea shipping crisis exposed the fragility of global trade routes, while the continued war in Ukraine kept energy security, strategic dependency and industrial resilience high on the agenda. The US elected a new president in November.

From policy design to implementation. In the EU, the first wave of companies came under the new CSRD regime, although the practical timing of first-time reporting varied between member states depending on national transposition and financial year. The European Parliament elections in June gave increased influence for the far-right populist agenda, and the publication of the Draghi report in September strengthened a broader political shift towards competitiveness, resilience and industrial capacity.

A more divided transition landscape. The inauguration of the new US president in January 2025 resulted in a more fragmented transatlantic landscape for climate and sustainability policy. The new administration withdrew the US from the Paris Agreement, escalated tariff conflicts and took a confrontational stance towards DEI policy. At the same time, questions of competitiveness, cost, security of supply, fossil-fuel dependency and critical technologies became more prominent in both public policy and corporate strategy.

Competitiveness moves to the centre. Within the EU, 2025 was a year of implementation pressure and policy repositioning. Companies became subject to ESRS-based reporting at the same time as the Commission published the first Omnibus package to reduce the administrative burden. The Commission also began to frame decarbonisation more explicitly through competitiveness and industrial resilience, through the Clean Industrial Deal agenda.

Energy shock, strategic vulnerability and a contested transition. By 2026, the European sustainability debate was unfolding in a more openly conflict-shaped environment. The closure of the Strait of Hormuz and the resulting oil price shock brought fossil-fuel dependency and energy security back to the centre of the political and economic agenda. At the same time, Europe's wider debate over sustainability became more openly contested: one side argued that decarbonisation were essential to long-term competitiveness, while the other more saw the sustainability agenda as a burden on industry. This tension also shaped the debate around the forthcoming ETS revision.

From expansion to simplification and industrial acceleration. Through the Omnibus process, the Union began simplifying parts of the sustainability rulebook in the name of competitiveness and lower administrative burden. In parallel, the proposed Industrial Accelerator Act sought to stimulate demand for low-carbon, European-made technologies and products. The overall direction was not a retreat from sustainability, but a reframing of it: the result, though, more uncertainty about the future regulatory environment.