EU Companies Research Articles

Five decades of policymaking in the EU – background and overview of the current state of employee financial participation

Purpose Opinions drafted by the European Economic and Social Committee (EESC), and reports and studies by the European Parliament and 2014 and 2018 Resolutions on employee financial participation (EFP) emphasised the growing importance of EFP, particularly with respect to small and medium-sized enterprises. Against this background, the commission included the promotion of employee share ownership in its Action Plan to reform European company law and corporate governance and embarked on the 2013/14 Pilot Project. Based on the most recent data on the scope and impact of various EFP schemes in EU companies and the legal and regulatory changes in individual Member States, the aim of this article is to provide an overview of policymaking and the main trends of the dynamics of EFP over the last three decades.Design/methodology/approach We give an overview (1) of the analysis of the most recent rounds of different large-scale cross-country surveys (2015 European Working Conditions Survey, 2021 CRANET [Cranfield Network on International Human Resource Management], 2019 European Company Survey [ECS]) and (2) of the EU policy documents and legislative acts over the last three decades. We provide a tabular overview of the status quo in all 29 countries under consideration as of January 2024 to provide the reader with an Alta vista summary view of all forms of EFP practised.Findings The European Commission’s interest in EFP has grown substantially since the publication of the first PEPPER Report in 1991 and the Council Recommendation on EFP of 27 July 1992. Since then, the European Union has not only extended from 12 Members States to currently 27 but has also faced many complex and urgent challenges. Financial and other crises have endangered prosperity and cohesion on the continent and both, the financial crisis of 2008/09, and the coronavirus disease 2019 (COVID-19) pandemic 2020/21 have left their marks on “Social Europe”.Originality/value The European Commission’s interest in EFP has grown substantially since the publication of the first PEPPER (Promotion of Employee Participation in Profits and Enterprise Results) Report in 1991 and the Council Recommendation on EFP on 27 July 1992. Since then, the European Union has not only extended from 12 Members States to currently 27 but has also faced many complex and urgent challenges. Financial and other crises have endangered prosperity and cohesion on the continent and both, the financial crisis of 2008/09, and the COVID-19 pandemic 2020/21 have left their marks on “Social Europe”.

패션산업의 ESG 법적규제와 경영현황에 대한 한국과 유럽연합 비교 연구

The purposes of this study are to compare Environment·Social·Governance(hence, ESG)-related regulations between the EU and South Korea affecting the domestic fashion industry, and to suggest a method for optimizing ESG management of domestic fashion companies by comparing the characteristics with ESG strategies of the EU and South Korean fashion companies. To achieve the purposes, a scoping review was implemented in terms of Arksey & O'Malley (2005)'s procedure. The findings are as follows: 1) The current Korea's sustainability disclosure guidelines are not systematically established compared to the EU. 2) Korea has not been legislated on sustainability disclosures. 3) There are some inadequate parts in the ESG sustainability management reports of domestic fashion companies. 4) ESG practice cases and risk response strategies of domestic fashion companies are being superficially dealt with. 5) ESG management strategies should be derived and integrated more systematically. 6) Objective ESG indicators are needed to introduce an integrated ESG management strategy. From the findings, it was suggested that Korea should quickly come up with effective and specific measures so that fashion companies can respond quickly to the ESG paradigm by preparing ESG-related policies and regulations.

Exploration of the Size Effect on Transaction Data of Non-publicly Traded EU Companies

Exploration of the Size Effect on Transaction Data of Non-publicly Traded EU Companies

Challenges for Japanese Companies Regarding Assurance Opinions Under The Corporate Sustainability Reporting Directive

The CSRD, which entered into force on January 5, 2023, imposes significant disclosure burdens not only on EU companies but on foreign companies operating within the EU regarding sustainability reporting. This paper examines the challenges that arise when Japanese companies seek assurance opinions compliant with the CSRD for their sustainability reporting. These challenges include the substantial room for improvement in Japanese companies’ sustainability management to seek CSRD-eligible assurance opinions, the lack of sustainability reporting standards that align with the ESRS, insufficiently established internal control processes regarding sustainability matters within companies, and the risk that Japanese assurance providers may be unable to express CSRD-compliant assurance opinions due to the absence of domestic qualification systems for assurance providers. To address these challenges, some form of policy response will be necessary. However, given the current situations, ultimately Japanese companies will likely need to address these challenges through self-help efforts.

From Triangular to Quadrangular Operations in EU VAT

If the VAT triangulation simplification could be applied to longer supply chains, many EU companies could significantly reduce the administrative burden of maintaining VAT registrations in multiple Member States to become part of EU chain transactions. In this article, the author wonders if this is really possible based on the position held by the European Commission and accepted with “quasi unanimity” by the VAT Committee.

Labeling and assessment of energy and sustainability performances in the civil sector: The case study of ESA-ESRIN in Rome

The continuous improvement of the energy and sustainability performances of buildings is stimulated by mandatory rules, economic incentives and voluntary sustainability pathway of which energy efficiency is one of the most important components. The tools to evaluate the energy, sustainability, automation and energy metering performances of buildings, to check the status and lead the investments, are often complex, slow, expensive and related to the specific Countries, making difficult the job for the facility management departments of national or international organizations in EU.The present paper wants to give a contribute to existing literature by providing a new energy, sustainability, automation and energy metering label system to quickly, simply and economically evaluate the performances of office buildings in Europe. This tool has been tested on a case study, a research center of the European Space Agency (ESA-ESRIN) in Rome, Italy.The results of the test show that the tool has been successfully applied on the buildings of the research center using the data provided by the facility management department of ESA-ESRIN and the energy audit of the center. The labels can correctly represent the state of the buildings in a more cost-effective way if compared to the national energy certification and to international sustainability protocols.This study provides the facility management departments of public and private companies in EU - especially if they manage buildings in different EU nations - a reliable tool to quicky evaluate the energy, sustainability, automation and energy metering performances of their buildings.

Comparing the ambition of EU companies with science-based targets to EU regulation-imposed reductions

Companies can support governments in bridging the emissions gap between current policies and the Paris goals by adhering to voluntary greenhouse gas (GHG) emission reduction targets that align with or surpass those implied by domestic policies. To this end, we assessed the potential impact of EU companies that set targets through the Science Based Targets Initiative (SBTi) in 2020 relative to an EU reference policies scenario that represents the estimated impact of the ETS and ESR policy instruments applicable at that time, with the aim of achieving a 40% reduction relative to 1990 by 2030. Two scenarios were assessed that incorporate the SBTi targets under these instruments: one assuming no additional reductions in the ETS sector due to the waterbed effect, and one with flanking measures to ensure additional emissions reductions regulated by ETS are materialised. Depending on the assumption made about these flanking measures, EU companies with SBTi-approved targets are projected to achieve a 4% or 14% reduction by 2030 compared to the EU 2020 policies scenario. Our findings illustrate that companies with SBTi-approved targets in 2020 were at most in line or modestly more ambitious than the 40% reduction target. This study highlights that voluntary reductions from SBTi companies regulated by ETS display higher estimated reductions than those solely regulated by ESR. Furthermore, this analysis indicates that more policy details are crucial for assessing the potential additional reduction of voluntary targets, and additional reductions under ETS should be assumed zero if a conservative estimate is required.

Impact of EVFTA on Attracting Investment into Vietnam

EVFTA (European-Vietnam Free Trade Agreement) is a free trade agreement between the European Union and Vietnam. The EVFTA Agreement is a free trade agreement between Vietnam and 27 EU member countries. Not only does it eliminate more than 99% of customs duties on goods, but the agreement also opens Vietnam’s services market to EU companies and enhances the protection of EU investments in Vietnam. This study shows that the EVFTA Agreement has a huge impact on Vietnam’s economy, specifically: Impact on economic growth, trade (import and export); impact on the state’s budget; impact on foreign direct investment; impact on changes in laws and institutions, improving the business environment. Based on an analysis of the current situation, this study proposes solutions further to enhance the advantages of the EVFTA Agreement for Vietnam.

EU Antitrust Fines and Managerial Liability – A Legal and Economic Analysis

Should companies that have been fined for EU antitrust infringements be allowed to recover such fines from their (former) directors or employees? On the basis of an analysis of the EU Treaty provisions, legislation and case law on antitrust fines, as well as of the economic nature of antitrust infringements and the economic rationale of fines on undertakings/companies, this paper argues that it would appear contrary to EU law to allow undertakings/companies that have been fined by the European Commission or by a national competition authority(NCA) for infringements of Articles 101 and/or 102 TFEU to recover such fines from the companies’ (former) directors or employees, as such recovery would significantly impair the full effectiveness of those fines. EU competition law, antitrust fines, deterrence, corporate liability, management liability, undertakings and companies, directors and employees, recovery of fines, incentives, agency problems

Auditors’ Carbon Risk Consideration under the EU Emission Trading System

ABSTRACT This paper addresses the effects of clients’ carbon risk on audit pricing. Using data from 438 EU companies for the period 2013–2019, we find a positive relationship between carbon risk (measured by the level of carbon emissions) and audit fees. Furthermore, we find that participation in the European Union’s Emission Trading System, a limited market and regulation scheme to mitigate special industries’ Greenhouse Gas emissions, strengthens the positive relationship between carbon risk and audit fees. Insights from additional tests indicate that auditors price carbon risk particularly for large clients that are under greater public scrutiny and that the increase in fees rather stems from a risk premium charged by the auditor than higher audit effort. With interest in climate change developing rapidly across society, practice and research combined with the increasing importance of reducing carbon risk, our findings are timely and should thus appeal to a wide variety of recipients.

Promotion and implementation of Polish mining investments in foreign markets on the example of Latin America

Foreign investments are essential in deepening economic relations between the EU and Latin America. As Latin America is fortunate enough to have deposits of metals that have become particularly desirable due to the green industrial revolution, it remains one of the dominant directions of exploration and investment in the mining sector. To intensify cooperation within the mining industries based on their complementarity, common goals, and shared values, the EU-Latin America Mineral Development Network Platform was established for all entities relevant to the mining sector, not only authorities but also businesses (including SMEs) and scientific and research units. To create a common European understanding of best practices in the processing and mining of raw materials in terms of social, environmental, and economic performance, voluntary EU principles for sustainable raw materials have been developed. Moreover, many EU countries working on updating or implementing (Poland) mineral policies, and more and more EU and Polish mining companies have been reporting non-financial aspects and impacts on local development, also in foreign countries. At the end of 2022, the European Commission proposed a Critical Raw Materials Act: securing the new gas & oil at the heart of our economy initiative to enhance the diversification and supply of critical raw materials to Europe. So far, the largest Polish foreign investment is a copper mine in Sierra Gorda in Chile, owned by KGHM Polska Miedź SA together with the Japanese Sumitomo Group (from February 2022, Australian mining group South32). Even according to KGHM CEO, Marcin Chludziński, the Sierra Gorda mine had needed restructuring and now is a demanding but very satisfying project. KGHM reported that the revised EBITDA for 2021 was the highest and achieved PLN 10.3 billion (ca EUR 2.3 billion) year on year (+56%) and for the first time, Sierra Gorda began to pay off its liabilities towards the owners. Moreover, the mine received an award in the category of large producers awarded by the State Mining Association in Chile (SONAMI). In addition to mining activities in the field of exploration and exploitation of deposits, Poland is developing cooperation in technology (mining machinery) and education. To ensure sustainable extraction of raw materials additional skills are required, in particular in the area of management and social sciences. The aim of the paper is to analyze and identify factors and best practices enhancing international cooperation and the environmental sustainability of minerals in line with the 2030 Agenda for Sustainable Development on the example of Polish investments in Chile. The analyzed case studies in a broader context, including the EU and Polish mineral policy, allow for the development of certain recommendations and tools for the promotion of foreign investments in the mining industry.

(Invited) The Status of SOFC and SOEC R&D in the Clean Hydrogen Partnership

The Clean Hydrogen Partnership—the successor of the Fuel Cells and Hydrogen Joint Undertaking (FCH JU)—aims to accelerate the development and improvement of advanced clean hydrogen technologies. It builds on 13 years of cooperation between public and private sectors through the FCH JU to help innovative technologies graduate from the experimental phases to be exploited by industry, businesses, and consumers for the benefit of Europe. The three members of the partnership are the European Commission, fuel cell and hydrogen industries represented by Hydrogen Europe and the research community represented by Hydrogen Europe Research. Supported topics cover all fuel cell technologies, SOFC being mostly developed for the stationary heat and power applications, while SOEC technologies are considered for the hydrogen production applications.There are different groups working in Europe on the SOFC/SOEC technologies and supported partially by the Clean Hydrogen partnership. So far, around €262 million have been allocated to support 71 projects, which address specifically SOFC or SOEC technologies. Largely thanks to this support, the EU is now a world leader on SOFC and SOEC technology with a well-established supply and value chain. In addition, several EU companies have commenced their efforts to increase their manufacturing capabilities with views to introduce their products beyond Europe. The mentioned figures do not include all projects of the first Call for Proposals 2022 of the Clean Hydrogen Partnership as some are still pending signature at the moment of writing. The Clean Hydrogen Partnership presentation will cover the status of R&D in Solid Oxide technologies in Europe including an overview of the European competitiveness in this sector.

The future of the technology-based manufacturing in the European Union

The manufacturing industry tries to innovate always to cater to customer-oriented products. The digitization of manufacturing is revolutionizing the future of this industry. The Industrial Internet of Things (IIoT) is bringing down the labor cost, reducing the machine downtime, and overall increasing the production speed. A new technological trend like Machine Learning (ML) is a subset of Artificial Intelligence (AI) that uses computer algorithms based on available data and can improve or decide further, automatically, based on experience, without the need for prior programming commands. ML can improve daily processes for identifying bottlenecks, developing products, controlling quality, providing security to the industry, and using AI robotics in place of humans. On one hand, technologies like ML, AI, IIoT, new materials, photonics, and rapid prototyping are driving the manufacturing sector in adopting a future version of Industry 4.0, and on the other hand, the European Commission (EC) has defined a roadmap until 2050 or more, in achieving the sustainable goal of carbon-neutrality and complete digitalization with resilience across the European continent. However, it is challenging to match the planned and actual roadmaps to the future of the technology-based manufacturing industry. There are uncertainties about how the future will be shaped by technologies in the EU manufacturing industry, in the changing political, environmental and social world environment. Recognizing these difficulties, the current article consults the available literature on this topic to determine the factors that will characterize the future of the manufacturing industry across EU countries. The relevant information about the EU manufacturing sectors has first been collected from various sources like Eurostat data, the EC policy documents, manufacturing company's annual reports, research reviews, journal articles, EU Industry Days annual event, etc. Then the collected data were analyzed to gain insight into the future of the technology-based EU manufacturing industry in the context of the European Commission's outlined policies. Variable factors from different manufacturing sectors are presented from different EU member states and scenario analysis was used for understanding the possible future. It is concluded that the future does not lie in adapting to the changing environment but in creating the future by EU companies themselves - revolution must be met by revolution. Their early experiences and path dependency can be seen as stubbornness, which may act as formidable barriers to building new capabilities. Therefore, companies must step-wise integrate resources to create a new process, and new structure, with personnel motivation, that fits with the broader European context in the coming decades.

Does ESG investing pay‐off? An analysis of the Eurozone area before and during the Covid‐19 pandemic

AbstractWe examine whether the stock return performance of 620 Eurozone companies based on their environmental, social and governance (ESG) ratings both before and during the Covid‐19 pandemic on both a nominal and risk adjusted basis. We also look at how country level governance indicators interact with our samples of ESGHigh and ESGLow companies to affect both nominal and risk adjusted investment returns. We use both panel data and cross‐sectional regressions as well as the difference‐in‐differences approach to derive the empirical results. We generally find some evidence that highly rated ESG firms performed slightly worse than lower rated ESG both overall and during the pandemic. However, once we control for governance at the country level, we find that in high governance scoring countries ESGHigh companies perform better than ESGLow companies. Finally, when we examine the relative performance of EU companies compared to companies in economies less impacted by the Covid‐19 pandemic, namely South Korea and Australia, we find that during the pandemic, the South Korean and Australian companies performed much better than their counterparts in Europe.

MENADŽERSKE PERCEPCIJE IZVOZNIH BARIJERA: UVID DOBIVEN ANKETOM PROVEDENOM U ICT TVRTKAMA NA KOSOVU

This study investigates the managerial perceptions of export barriers of Kosovo ICT companies and provides some policy proposals. For this purpose, the study uses a survey of owners or managers of the ICT companies in Kosovo. The data collected through an online questionnaire survey using a Qualtrics platform were analysed. The survey results reveal four significant export barriers: external institutional barriers, such as visa requirement for Kosovo to visit companies in EU and access to international markets, financing issues for scaling up and growth and human resources barriers, and difficulties in having comprehensive information about the target markets and finding the right partner. Findings from the factor analysis clustered barriers to export into four groups: (1) formal and informal institutions; (2) market information and networking; (3) skills, technical capacities, and quality standards; and (4) International branding, visa requirement and lack of government support. The findings will help boost the growth potential ICT sector, address their needs, and raise policy awareness of the importance of the ICT sector for generating employment and economic growth. The study provides critical practical implications and policy recommendations for government, business associations and ICT companies.

(Invited) The Status of SOFC and SOEC R&D in the Clean Hydrogen Partnership

The Clean Hydrogen Partnership—the successor of the Fuel Cells and Hydrogen Joint Undertaking (FCH JU)—aims to accelerate the development and improvement of advanced clean hydrogen technologies. It builds on 13 years of cooperation between public and private sectors through the FCH JU to help innovative technologies graduate from the experimental phases to be exploitedby industry, businesses, and consumers for the benefit of Europe. The three members of the partnership are the European Commission, fuel cell and hydrogen industries represented by Hydrogen Europe and the research community represented by Hydrogen Europe Research. Supported topics cover all fuel cell technologies, SOFC being mostly developed for the stationary heat and power applications, while SOEC technologies are considered for the hydrogen production applications. There are different groups working in Europe on the SOFC/SOEC technologies and supported partially by the Clean Hydrogen partnership. So far, around €262 million have been allocated to support 71 projects, which address specifically SOFC or SOECtechnologies. Largely thanks to this support, the EU is now a world leader on SOFC and SOEC technology with a well-established supply and value chain. In addition, several EU companies have commenced their efforts to increase their manufacturing capabilities with views to introduce their products beyond Europe. The mentioned figures do not include all projects of the first Call for Proposals 2022 of the Clean Hydrogen Partnership as some are still pending signature at the moment of writing. The Clean Hydrogen Partnership presentation will cover the status of R&D in Solid Oxide technologies in Europe

Protecting the Internal Market From Subsidisation With the EU State Aid Regime and the Foreign Subsidies Regulation: Two Sides of the Same Coin?

The European Union’s (EU) internal market is a popular venue for international investments and activities by third-country entities. Once on the EU internal market, foreign companies can operate freely and enjoy the benefits of the internal market: free circulation of goods, services, establishment, and capital, complemented by competition and State aid rules to allow a level playing field with EU companies. However, in recent years, the issue of subsidisation of companies active on the EU internal market by third States and the corresponding distortions have gained novel prominence and lead to an increased discussion in practice and academia. Reports by the European Court of Auditors,1 the German Monopoly Commission (Monopolkommission),2 and several Member States3 have given examples that third-country subsidies, notably those subsidies granted by the Chinese State to State-owned enterprises (SOEs) with subsidiaries active on the EU internal market, would constitute State aid if granted by an EU Member State. Yet, State aid rules do not apply to such financial contributions granted by third States. Therefore, foreign subsidies could create an uneven playing field on the internal market: the companies receiving financial support from EU States are subject to EU State aid discipline, while companies receiving third-country subsidies are not subject to comparable State aid systems. Thus, the latter are having a noticeable advantage over EU companies for their economic activities on the EU internal market.

How Does Environmental Data from ESG Concept Affect Stock Returns: Case of the European Union and US Capital Markets

This article examines the environmental, social, and governance (ESG) performance of firms, with a focus on the environmental pillar of the ESG concept. It is believed that the price of equities as well as sector-specific characteristics may be affected by ESG data. It also contributes to the argument that environmental performance and governance quality are related. The purpose of this paper is to statistically validate the separated environmental data from the ESG concept and investigate its impact on the equity price in the EU and the United States. Using simple linear regressions and a fixed effect panel data model, the association between environmental score and governance score, as well as equity price and environmental score, was estimated. This study examines the 500 largest US corporations comprising the S&P 500 index (S&P) and the 600 largest EU companies comprising the STOXX Europe 600 index (STOXX) (SXXP). This article analyzes ESG statistics for the period 2015–2020. The results indicate that a higher government score has a favorable effect on environmental pledges and that changes in stock price depend in part on environmental data. The novel contribution of this paper is that the results suggest a sector-specific contribution to the model, and it would be fascinating to analyze sector disparities and their ESG-related policies in greater detail. Doi: 10.28991/ESJ-2023-07-02-08 Full Text: PDF

Pharma challenges to adoption of microphysiological system in drug research and development, especially safety assessment

In the environment surrounding the pharma industries (1) declining productivity in research and development in pharma industries, (2) spreading of 3Rs in animal testing, and (3) diversifying of modalities, the regulatory authorities and pharmaceutical companies in US and EU are paying attention to the microphysiological system (MPS) to actively incorporate cutting-edge technologies into the evaluation assays used for approval applications for drug research and development. MPS generally refers to an in vitro culture system in which a culture environment close to that of a living body (in vivo) is reconstructed in a created minute space using a microfluidic device. Currently, many products have been put into practical use by US and EU companies and are sold all over the world. This time, the trends of MPS as a drug development tool, especially case of safety assessment, issues for implementation to pharma, and future perspectives are described in this article.

Політика публічних закупівель у реалізації стратегії цифрової трансформації: пріоритети ЄС та України

The aim of the article is to study the policy of public procurement and the scientific substantiation of its priorities in the context of the implementation of the digital transformation strategy in the EU and in Ukraine. The research methodology is based on the content analysis of the digitalization policy of public procurement used in the practice of both the EU and Ukraine, as well as in its scientific generalization to substantiate the priorities for the implementation of the digital transformation strategy. The authors examined the model of interaction of subjects of the public procurement market in the EU with the use of digital tools. It is found that the harmonized EU rules in the field of application of common digital public procurement instruments are designed to ensure fairness, transparency and non-discrimination in determining participants in public contracts, to which not only EU companies are admitted, but also the representatives of WTO Member States that have signed the Agreement on Government Procurement. The article discloses the stages of introduction of digital public procurement tools in the EU and in Ukraine. It is determined that in the EU, the process of digitalization of public procurement began in the second half of the 2000s with the introduction of an electronic diary of tenders, significantly intensifying in the second half of the 2010s with the adoption of a package of the EU directives in the field of public procurement and the phased introduction of digital tools (invoices, forms, applications for tenders, the European single procurement document, etc.). The current stage of transformation of digital public procurement tools in the EU was marked by the introduction of a single space for these public procurement in the EU from 2023. The priority directions of digital convergence of the public procurement systems of the EU and Ukraine are substantiated, including the development of cooperation tools for joint public procurement, promotion of competition, countering the corruption, as well as strengthening the professionalization of the public procurement systems.