Assessing the environmental fallout as Europe lurches rightward

Many Germans voted for change in the country’s February 23 elections, following a second consecutive year of economic contraction. In defeating Chancellor Olaf Scholz’s centre-left Social Democratic Party (SDP), Friedrich Merz’s right-wing Christian Democratic Union (CDU) party secured 28.52 percent of the vote and 208 seats in the Bundestag.

The election, though, will likely be remembered not for Merz’s victory but for what happened down ballot: 

• Alternative for Deutschland (AfD), an extreme far-right party that openly espouses neo-Nazi sentiments and denies the existence of human-caused climate change, came in second, with 20.8 percent of the vote. AfD now holds 152 seats, up from 83 in 2021.
• A socialist left party, Die Linke party, also won more seats, with eight percent of the vote.
• Die Grünen, the German Greens, lost seats; only 11.61 percent of voters backed the party.

For business, these results are significant. As Europe’s largest economy falters, and climate is becoming a polarizing issue in a country long considered a leader on clean energy, right-wing German politicians frequently pit environmental action against economic growth. For CSOs and others on the sustainability front lines, this evolving situation will likely require changes in strategy and tactics.

Already, CSOs are seeing fewer sustainability roles advertised and environmental work increasingly absorbed into other departments. And, as far-right parties gain influence, some think businesses will have to become more publicly political. Indeed, some German companies are abandoning traditional positions of neutrality to voice political opinions.

Across the continent

Many think this wave of “greenlash” in Germany and the European Parliament was inevitable.

More right-wing politicians joined the European Parliament last summer, many campaigning on the promise of rolling back the EU’s environmental regulations. Some were responding to the protests of European farmers, who blocked city streets with tractors to challenge elements of the European “Green Deal,” a set of policies intended to make the bloc carbon neutral by 2050.

Environmental policies are already being reassessed and weakened. The phase-out of the internal combustion engine, originally set for 2035, has been called into question; the EU Deforestation Regulation is delayed and the EU Emission Trading Scheme is expected to be reevaluated this year. 

At the end of February, the European Commission published proposed changes to the Corporate Sustainability Reporting Directive (CSRD) that would see 80 percent fewer companies required to report and sector-specific reporting scrapped.

That said, not all European far-right parties deny climate change to the same extent as the AfD. Rather, their problem is with carbon taxes, green energy subsidies and emissions regulations, which they deem to be the agenda of the “global liberal elite,” said Peter J. Bori, a PhD candidate in environmental politics and a researcher at the Democracy Institute of the Central European University.

“They accept that environmental degradation and some climatic changes are taking place,” Bori said. “But they tend to downplay the extent to which it is caused by human economic activity or understate the urgency of taking action against it. When they do see humans as responsible, they tend to externalize the blame to ‘others’ — such as immigrants, foreigners, neighboring countries.”

Climate denial gaining

Although extreme-right politicians on the continent have been successful — think: Le Pen in France, Salvini in the Netherlands, and Meloni in Italy — Germany was for a long time the exception. “This is now changing,” said Daniel Freund, a Green MEP in Germany.

The AfD is now a far more influential parliamentary force, with the power to water down Germany’s climate policies. The party’s leader, Alice Weidel, has suggested she wants to “tear down” Germany’s wind farms and rejects the European Green Deal. And AfD’s official federal election program says, “The alleged scientific consensus on ‘man-made climate change’ has always been politically constructed.”

Cuts, closures and continued action

In any event, sustainability professionals are “one step before panic” following the German election, said Philippe Birker, co-founder of Climate Farmers, a European regenerative agriculture education company based in Berlin. “We have just decided to close our carbon credit arm in the organization, and this is largely due to the shift in the political landscape.” 

“I know qualitatively that more than 10 different sustainability actors [in Europe] are either closing or downsizing their teams,” Bicker said.

That’s the worrying news. More encouraging is that many companies continue to move forward on climate action.

“The BMW Group has a clear plan and a long-term sustainability strategy that we consistently implement, independently from political movements,” said Cornelia Bovensiepen, BMW Group’s sustainability spokesperson.

Alina Arnelle, CSO of BeCause, a Danish sustainability data company for the travel, tourism and hospitality sectors, is one of the CSOs who has noticed fewer sustainability job openings. But she also sees evidence that environmental work at the corporate level continues, albeit in different forms. 

“I see sustainability being dispersed and integrated into roles that have been there forever,” Arnelle said. “For example, marketing is responsible for communicating how sustainable the company is; procurement is responsible for having criteria for making supplier choices. Then you have risk and legal departments, which integrate ESG risk into their overall risk assessment of the company.”  

Going forward

Some observers note that German companies and leaders seem more inclined to voice political opinions. “Five or 10 years ago, many business leaders tried to be silent around political topics,” said Matthias Ballweg, co-founder of Circular Republic, a Munich-based company helping other businesses adopt circular economic models.

“I’ve never seen so many business leaders actively voice political statements, mostly around geopolitical topics and against the AfD,” Ballweg said. “But obviously it’s on both ends of the spectrum—we’ve also seen quite a number of [large] donations from business leaders to the super right-wing party in the recent weeks.” 

“We need to get a bit more political at a moment when the chips are down in Europe,” said Martin Stuchtey, a professor at University of Innsbruck and the founder and co-CEO of the Munich-based Landbanking Group, which enables farmers and other land stewards to earn income based on the ecosystem services their lands provide.

Stuchtey argues that any idea that politics is beyond the concern of business leaders is outdated. “There’s now an almost corporate political responsibility to say, ‘Look, we can only be successful and profitable as a company if we live in an open society where minorities are protected, where labor migration is possible, where you can trust your newspapers and where there is public debate.”

Going forward, then, individual CSOs will have to decide if and when to speak up as Merz consolidates his climate agenda and the EU reveals the extent of its regulatory re-openings.

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