The French have been the first to introduce new laws requiring firms to disclose what considerations they’ve made to environmental, social and governance issues during their decision-making processes. They want companies to take responsibility for their carbon output and actively look for ways to reduce it, and invest in low-carbon and renewable energy. Investors are also required to measure progress to self-set targets, and if not achieved, to explain why.
The text isn’t just aimed at companies generating energy; banks, credit providers and listed companies are also responsible. Listed companies will also have to state how they are trying to mitigate the risks of climate change. Though this latter detail is not new, other European countries, like the UK, already have legislation in place for this.
A report on the climate change risks will be published by the French government by the end of 2016.
Ecology minister, Ségolène Royal, stated that the new legislation is “the most advanced and ambitious piece of environmental legislation in Europe, and probably the world.”
Last Minute Addition
One of the last minute additions to the new legislation is that the duty on the carbon content of fuels (known in France as la taxe carbone or the carbon tax) will increase from €14.5 to €100 per ton of CO2. This increase will be implemented by 2030.
This alone is massive for businesses. It essentially increases the amount of tax to run an average computer for the year, from approximately €2.72 to €18.70. For the average data center, the cost will be significantly more.
Nuclear Energy A Target As Well
The bill’s main aim is to reduce the energy consumed in France by half within 25 years. By 2030, the consumption of fossil fuels needs to be reduced by 30% and the dependency on nuclear power will also need to be reduced. Currently, 75% of all energy in France is generated by nuclear. Within 15 years, French politicians want this to be no more than 50%.
There is also a plan to boost jobs significantly. Around 75,000 new jobs will be created by retrofitting France’s housing stock, which consumes approximately 50% of the nation’s energy. Air pollution is also being tackled. The safe limits have been exceeded several times in the French capital, and the hope is that a clean transport program will help reduce carbon emissions and reduce air pollution.
The Effect On Business
Part of the issue is that businesses will have to adopt greener technology or face stiffer taxes in France. If your organization has operations in France, this could be rather costly, especially if you use any data centers which are typically highly powered.
While the cost of investment will be significant early on, in the long term, it could save your organization more money. For instance, moving away from reliance on fossil fuel supplied energy and instead looking for ways that renewable energy could be used to power data centers and office locations.
Also, businesses could look towards staff and encourage them to think actively about their commute to work. If public transport or car sharing schemes are used, their carbon footprint can be dramatically decreased.
Organizations will have to look at how they set targets for their energy consumption, monitor usage and then report it. Staff will need to play a critical part in this, especially in the reduction of usage.
French legislation is making it costlier for high carbon use technology in the country. Organizations are becoming responsible for setting their targets for carbon reduction and if not achieved, reporting why. This puts the emphasis on companies to look for solutions, including looking at data centers, for ways to protect the environment.
Will you be affected by the changes in the French legislation? What steps would you take to make sure lower your carbon footprint? Let us know in the comments below.