To encourage a sustainable recovery, the application of environmental and social conditionalities to public aid granted to companies is put forward as a means of orienting the strategic choices of economic actors towards a more sustainable future. What could these conditionalities consist of? And what elements would make it possible to establish a governance framework capable of monitoring and ensuring compliance with environmental and social commitments? This Policy Brief aims to shed light on the issues at stake in this debate and makes recommendations in terms of governance at national and European level.
- Environmental and social conditionalities for public aid can be set at the level of a company or an economic sector. They are already applied in some cases.
- In the case of a company, these conditionalities require the choice of a reference point and a geographical or environmental scope of responsibility. They can be based on extra-financial reporting indicators and existing initiatives to build decarbonisation pathways on a company scale.
- The application of conditionalities to public aid requires the establishment of a governance framework including : (1) a co-definition of the company's extra-financial objectives with the State and stakeholders; (2) a transparency framework on commitment; (3) a mechanism for monitoring and reviewing the achievement of objectives; and (4) incentives for achievement and/or sanctions in case of non-compliance with objectives.
- Sustainable conditionalities should be based on the elaboration of sector-specific roadmaps and taken to the European level in the framework of the revision of state aid rules foreseen in 2021 to ensure their insertion into the competition rules of the European market.
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