In the newest issue of the Sorainen ESG newsletter we bring you the latest updates on environmental, social and governance trends across the European Union and the Baltic States. This month’s issue features crucial insights into recent EU-level developments and sustainability initiatives, along with some interesting news from Estonia, Latvia and Lithuania.
Legislative news and ESG initiatives in Estonia, Latvia and Lithuania
Lithuania
The Minister of the Environment has approved Construction Technical Regulation STR 2.01.12:2024 “Construction climatology”. This determines the statistical characteristics of climate parameters, necessary for territory planning, design and construction. Climatic information includes solar radiation, air temperature, absolute air humidity, wind, precipitation, snow cover, frost, soil temperature, corrosiveness of the atmosphere, and other atmospheric phenomena. The Ministry of the Environment observes that the new regulation will allow developers to choose appropriate measures to mitigate the negative effects of climate change and to take into account the climatic specificities of the region while designing new buildings.
Latvia
On 12 November, amendments to the Accounting Law were published; these are going to come into force at the beginning of 2025. The amendments provide that starting from 2025 in all payments between public administrations and businesses – i.e. in the G2G (Government to Government), B2G (Business to Goverment) and G2B (Government to Business) segments – (and starting from 2026, all companies) businesses will be obliged to format e-invoices according to XML (Extensible Markup Language) and they will have to comply with the PEPPOL BIS Billing 3.0 specification.
Estonia
The draft law to transpose the Corporate Sustainability Reporting Directive (CSRD) is currently awaiting its second reading in the Estonian parliament. Meanwhile, the long-anticipated waste reform draft has been published, requiring local governments to organise the separate collection and transport of packaging waste directly from the source. Additionally, the Estonian legislator is taking proactiv steps to align the national Waste Act with EU Regulation No. 2023/1542, establishing harmonised standards for the sustainability and safety of batteries across Europe.
EU-level news
EU invests €4.8 billion of emissions trading revenues in innovative net-zero projects
The European Commission has awarded EUR 4.8 billion in grants to 85 innovative net-zero projects across 18 countries, including Estonia, as part of the EU’s largest Innovation Fund initiative to date. These projects, spanning energy-intensive industries, renewable energy, energy storage, and net-zero mobility, aim to accelerate the deployment of clean technologies, especially in hard-to-decarbonise sectors. Expected to come into operation by 2030, they collectively aim to reduce emissions by 476 million tonnes of CO₂ equivalent over their first decade. Additionally, selected projects align with EU policy goals, including clean-tech manufacturing under the Net-Zero Industry Act, and contribute to strategic renewable hydrogen and sustainable transport fuel production.
EU invests over EUR 380 million in 133 new LIFE projects to support the green transition all across Europe
The European Commission has granted EUR 380 million to 133 LIFE Programme projects across Europe, including in Estonia and Lithuania, advancing EU Green Deal goals like climate neutrality and biodiversity protection. The selected projects demonstrate practical ESG-focused advancements, such as Italy’s LIFE GRAPhiREC project for recycling battery graphite and Spain’s LIFE POLITEX initiative for sustainable textile production. Other initiatives, like training programmes for zero-emission construction and community-driven energy projects, highlight scalable ESG business solutions that support sustainable growth, long-term resource efficiency, and reduced emissions.
EU to support continued global climate action and push for ambitious finance and investment goals at COP29
At COP29 in Azerbaijan, the European Union aims to prioritise aligning global financial flows with the Paris Agreement’s climate goals, focusing on the adoption of a New Collective Quantified Goal (NCQG) for climate finance. The EU, already the largest provider of climate finance, is working to mobilise broader contributions from both public and private sectors to support developing countries in reducing emissions and adapting to climate impacts. Additionally, the EU aims to reinforce energy transition goals, including increased renewable energy investments and energy efficiency, while pushing for robust international carbon markets and high standards for carbon offsets.
A key focus for the EU will be ensuring a just transition, with the Commission partnering with the ILO to co-host the Just Transition Pavilion, which will highlight the need for quality green jobs and the integration of social aspects into the global climate strategy.
European Parliament approves more efficient and greener EU airspace
The European Parliament has approved reforms to improve the management of European airspace, aiming to enhance flight efficiency, reduce delays, and support climate neutrality. By strengthening national performance plans for air navigation services, the reforms include binding targets and incentives for more efficient and environmentally friendly flights. The establishment of an independent Performance Review Board will support the Commission and EU member states in decision-making. Additionally, the Commission will set EU performance targets focusing on capacity, cost-efficiency, climate and environmental factors, reviewed every three years.
The reforms also include a focus on greener air navigation charges, encouraging airlines to adopt more fuel-efficient routes and clean technologies. To foster competition, the bill enables air traffic service providers to procure other services under market conditions.
ESMA 2024 Enforcement Priorities: strengthening sustainability reporting under CSRD
The European Securities and Markets Authority (ESMA) has issued its 2024 European Common Enforcement Priorities Statement, which outlines key areas of focus for corporate reporting, particularly in sustainability. This year, ESMA places significant emphasis on the CSRD, with specific attention to double materiality assessments, taxonomy compliance, and integration with financial reporting. Companies are expected to assess and report both the impact of sustainability issues on their business and their own impact on the environment and society, ensuring transparency in this process.
The ESMA also highlights the importance of aligning sustainability and financial reports, ensuring consistency in entities and data across both. In addition, the EU Taxonomy is central to sustainability disclosures, requiring companies to use the correct taxonomy templates to report on activities aligned with environmental objectives.
EIB investment survey 2024: more than 60% of European companies have invested in climate mitigation and adaptation and more than 70% in their own digital transformation
The 2024 European Investment Bank (EIB) survey highlights that EU businesses are at the forefront of climate mitigation and adaptation, with 61% already investing and 53% planning to do so. The survey emphasises the growing adoption of advanced digital technologies, with 74% of European firms enhancing their competitiveness through digital solutions. Despite challenges like high energy costs and fragmented markets, EU companies are also focusing on strengthening their supply chains and improving their resilience in the face of geopolitical risks and trade disruptions. This shift reflects a strong commitment to sustainability and innovation as key drivers for future growth.
Additionally, the survey reveals that EU businesses are more likely than their US counterparts to implement sustainable practices, such as renewable energy use and emissions reduction, as part of the green transition. However, concerns over skilled labour shortages and market fragmentation persist, highlighting the need for continued investment in both green and digital transformations in order to ensure long-term competitiveness and economic resilience.
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Contact the authors:
Co-head of Sorainen ESG team, Counsel, Lithuania
vitalija.impoleviciene@sorainen.com
Senior Associate, Latvia
Associate, Estonia
