Impact Assessment and the EU Taxonomy: Reflections from Croatia
A message from IAIA CEO Gary Baker
I recently had the opportunity to present at a conference on Impact Assessment and the EU Taxonomy in Opatjia, Croatia, organized by HUSZPO, the Croatian Association of Experts in Nature and Environmental Protection.
Timing was perfect, with the macro mood music being set by confirmation of an outline political agreement being reached on the first EU omnibus simplification bill occurring on day 1 of the event! The reception to this news really depended on what your opinion had been going into the event—there was little in the announcement that was markedly different from what had been trailed in media speculation. I would summarize opinions in the room as:
- A general sense of resigned acknowledgement on the narrowing of scope and threshold adjustments within the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD).
- Details on actual operability are still set to be the bigger test.
- Early wave 1 CSRD submissions suggested that (large) corporates were navigating legislation reasonably well with no great explosion in reporting length, particularly where the materiality qualification was adhered to.
- Elsewhere there has been frustration from some large corporates that the internal prep required to generate these early reports was now being questioned by further regulatory uncertainty—was it all wasted effort?
- Befitting the resiliency that has been required by sustainability advocates in the past year, there were many comments centred around “not letting the perfect be the enemy of the good”, and “the Green Agenda remains intact”.
- With the legislative momentum stalled in many jurisdictions, attention was focused on whether economic and corporate considerations were established enough to continue forward progress.
On the final point, corporate uses of ESG data might be summarized being for 1) risk management, 2) regulatory purposes, and 3) reporting requirements. With items 2 and 3 now losing any impetus, it is the degree to which corporates can utilize the data collected to improve risk management and operational sustainability that could determine future progress and adoption.
Arguably the same distinction can be applied to impact assessment data and processes- risk/regulation/reporting.
But generally the discussions around impact assessment were excellent, with many worked case studies and examples of applications at both national and regional levels. The standout conclusion, for me, was the appearance of social considerations in most discussions, compared to last year’s event in Dubrovnik where social sat on the fringes looking in. But there was also acknowledgement that:
- Expert knowledge and capacity in conducting social assessment was lacking across the region (it was often being carried out by environmental practitioners as an “extra”).
- Project sponsors generally see social issues as difficult and time consuming, lacking quantitative measures, despite the strong lead provided by World Bank guidelines (WHO social measures) and EIB practices.
From an IAIA perspective, my key takeaways were:
- Confirmation (if we really needed it) that any, and all, assessments demand consideration of complex, over-lapping risks, and if we are going to produce effective analysis that can generate positive outcomes, we need to be equipped to highlight these inter-dependent (and often cumulative) risks. Think systems!
- It was a strong argument for strategic environmental and social assessment (SEA/ SESA) at regional and national levels.
- There is a clear need to further promote and increase the training we offer in the fundamentals of Social Impact Assessment.
- Time spent talking to the practitioners in the field tasked with interpreting and applying guidelines created is never wasted effort .
More generally, the conference was a good opportunity to talk about what IAIA and impact assessment as a discipline can offer; it reaffirmed for me that irrespective of the macro policy backdrop, sharpening EIA application and best practice, supported by judicious application of new technologies and data processing capabilities, still positions impact assessment as the world’s foremost tool for looking ahead before we act.
