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Press release Increase corporate acceptance through targeted climate regulation

The fewer detailed specifications companies receive, the more effective climate protection becomes

There is a general consensus among the Mittelstand companies in Germany that the ecological transformation is necessary. But there is currently a risk that too much detail and an excessive certification obligation could lead to strategies of alternative action. "In principle, family-owned businesses are supportive of the regulatory goal of climate protection – not least because of their regional ties and sense of responsibility towards their homeland and successors. Additionally, intrinsic motives such as the personal conviction of the executives, as well as extrinsic motives such as customer expectations, also play a role“, sais IfM researcher Hans-Jürgen Wolter. At the same time, the study "The Entrepreneurial Acceptance of Climate Protection Regulation" also shows that entrepreneurs consider new regulations now much more critically because they disrupt operations within companies and tie up manpower by dealing with the new regulations.

Risk of exclusion of market participants

Entrepreneurs particularly negatively assess the increasing number of certification requirements because they lead to additional costs and higher bureaucratic burdens. „In this context, a problem arises from the limited availability of certification options. This increases certification costs which in turn can result in some companies missing out because they lack sufficient financial resources. Since certain certificates are, for example, a basic requirement for accessing funding and for bidding on contracts from public or private major customers, these Mittelstand companies are effectively excluded from market participation," criticizes Hans-Jürgen Wolter.

Similarly, Mittelstand entrepreneurs also view the complexity of sustainability reporting critically, which larger family-owned businesses and their suppliers will face in the future. They must first use a materiality analysis to determine which of the 1,000 topics – from CO2 accounting and climate risk assessment to issues of equality and good governance – they need to report on. Additionally, they must also evaluate which exemption and deferral options are relevant to them.

Granting companies more flexibility

To promote a positive attitude among family entrepreneurs towards ecological transformation, IfM researcher recommend limiting climate regulations to as few instruments as possible with the greatest effectiveness. This includes, for example, the EU Emissions Trading Scheme, the CO2 border adjustment mechanism, or climate social funds. Such flexible solutions would best utilize the long-term innovation potential of businesses for more extensive climate protection – and limit mandatory certifications to a few key indicators.