EU Competitiveness Compass

The EU Competitiveness Compass is a strategic framework introduced by the European Commission to boost economic growth and innovation. Presented in January 2025, Europe aims to enhance innovation through reforms, streamline regulations, and strengthen supply chains.

The European Union’s climate action future

“The future of European competitiveness – A competitiveness strategy for Europe”, commonly referred to as the Draghi report, identified three areas to boost marketability, which the Compass used to outline a competitive framework. Two of the three include closing the innovation gap and securing trade agreements; the third is a decarbonisation plan that will be accomplished through:

Aligning decarbonisation policies within broader economic policies and industrial strategies
Boosting access to affordable and stable energy
Enhancing the business case for energy transition
Fostering competition among clean tech manufacturers

Citing high energy prices and financial uncertainties, the Compass sets forth initiatives – including the Clean Industrial Deal and Affordable Energy Action Plan – to encourage greater access to clean and affordable energy.

Furthermore, the Compass anticipates customised action plans for energy-intensive industries, including steel, metals, and chemicals. These sectors are fundamental to the European manufacturing system but are particularly vulnerable during this transitional phase.

EU Competitiveness Compass and the EU Omnibus

In addition to the three pillars, the Compass identifies five competitive drivers:

Simplification
Lowering barriers to the single market
Financing competitiveness
Promoting skills and quality jobs
Better coordination of policies at EU and national level

Under simplification, a proposed Omnibus would refine sustainability reporting under the Corporate Sustainability Reporting Directive (CSRD).

How will the Competitiveness Compass affect the European Green Deal?

EU Commission President Ursula von der Leyen maintained that the EU remains committed to its climate targets, staying on course for the European Green Deal. To strengthen Europe’s resilience to climate change, the EU is updating climate risk assessments, strengthening infrastructure, and incorporating climate action solutions in cities and agriculture. At the same time, the Competitiveness Compass supports the green transformation of industries and promotes new technologies, with a European Climate Adaptation Plan on the way to guide these efforts.

For two decades, ClimatePartner has been driving corporate climate action. While regulations evolve, best practices remain the same: companies measure their carbon emissions, set targets, implement reductions, and support climate projects.

Find out more about how you can start your climate action journey today.