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Sustainable and responsible business

Financial incentives

Financial incentives

Consumers, though informed about resource-efficient and eco-friendly products through labelling, may be put off by a higher purchasing price for these products compared to other products.

As a consequence, sales remain low and industry is not encouraged to invest in sustainable products. On the contrary, stronger demand would allow manufacturing of eco-friendly products on a larger scale, so that their cost and price would go down.

In order to boost demand, many Member States give incentives for buying eco-friendly products, such as windows with high thermal insulation.

But incentives are granted for very different levels of environmental performance throughout Europe (often in regions very near to each other), so that demand for eco-friendly products is stimulated in an uneven manner.

Harmonised incentives at EU level would help eco-friendly products to reach that critical volume of sales for which their manufacturing makes good business sense.

Incentives

The Commission proposed that products below a certain level of energy or environmental performance can not receive incentives from the EU institutions or Member States, so that products above this level benefit from a kick-on effect.

One of the categories defined for the mandatory energy and environmental labelling will be used to identify this level: products not attaining the energy or environmental performance required for this category will not receive incentives from the EU or Member States.

Public procurement

Public authorities have a direct influence on consumption: their own purchases represent 16% of EU GDP.

The Commission proposed that products below a certain level of energy or environmental performance can not be purchased by public authorities, so that the kick-on effect for products above this level is magnified.

One of the category defined for the mandatory energy and environmental labelling will be used to identify this level: products not attaining the energy or environmental performance required for this category will not be purchased by Member States or the EU (they will not be selected in calls for tender).

The Commission also proposed that public authorities share a common approach regarding green public procurement practices, on a voluntary basis.

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