EU lawmakers weaken sustainability rules as COP leaders call for more action.
This is about competitiveness for businesses in the European Union.
We have been falling behind.
It means there's an absence in leadership on this issue and the EU really could have been expected to step in, and it's clearly not.
It's World Business Report from the BBC World Service.
I'm Sam Fenwick.
As world leaders meet in Brazil to push for greater climate ambition at COP, the European Parliament has voted to scale back its sustainability rules.
Lawmakers say the move will help businesses be more competitive, but environmentalists see it very differently.
And baristas across dozens of coffee shops serve up a strike on Starbucks' busiest day.
Thank you.
The changes strip back requirements for companies to check their supply chains for human rights and environmental harm and remove the need to publish climate transition plans.
Supporters say the original rules created too much tape, too much red tape and left European firms struggling to compete against US and China.
Critics though, argue that it sends the wrong signal during a global summit which is focused on raising ambition.
So in a moment.
We'll get reaction from COP.
But first, let's hear from Jürgen Warborn.
He is the lead negotiator on the sustainability rules in the European Parliament and a member of the centre-right Europe's People's Party.
So this is about competitiveness for businesses in the European Union.
We have been falling behind when it comes to growth for quite some time.
There is a number of things that we have to do to sort out this and create jobs and growth and prosperity in Europe.
And one of the most important parts is to simplify our rules, not only when it comes to sustainability issues, but all of the rules, basically.
We have to go through and see what we can do to improve them so it's easier to do business in Europe.
And that's a way to come back to growth and jobs.
So supporters of the relaxation say that the original framework was just too heavy for businesses to deal with, particularly small businesses.
What evidence then convinced you that 90% of companies should no longer have to comply?
Yeah, well, that's exactly it.
If you have heavy rules and regulation, that means that less people will be interested in starting business.
You will have less of investments in Europe, less jobs in Europe, and we needed to make a change.
That was very clear.
And this is about the administrative burdens when it comes to sustainability issues.
We still have a lot of rules and regulations when it comes to sustainability, but this is about the reporting obligations for companies.
And we realized that it's been too heavy.
And now we decided together in the parliament that we would reduce that obligations of reporting.
But there are still a lot of sustainability regulations, of course.
The danger is then, that most companies won't now be required to pay much attention to environmental or human rights abuse within the supply chain.
No, I would say that is not 100% correct.
Of course, there are, as I said, a lot of other rules and regulations in place, both when it comes to human rights issues and when it comes to the climate.
We have the... forced labour regulation, for example.
We have the emission trading system when it comes to the climate, of course and a lot of other rules and regulations.
And today in the parliament we also have a decision on the 2040 goals.
When it comes to The climate targets, we are trying to balance sustainability issues during this mandate.
It was a lot of focus on the climate issues and now we are balancing in all the sustainability issues And, as you and your listeners know, sustainability is about the green issues.
It's also about the social issues and the economical issues.
And now we are balancing this in a better way so that it will work for businesses and citizens in Europe.
Are you worried about the optics on this?
It doesn't really look good, does it, that now 90% of companies won't have to comply?
Quite the opposite.
This is very good, because this means that we will come back to growth and this means that companies will.
They can focus on innovation instead of paperwork.
And of course, all the unnecessary paperwork has cost a lot of money for businesses.
And with this decision, this vote in plenary today, we are saving around 5 billion euros annually for businesses.
And that is 5 billions of euros that can be invested in research and development in new products and services that actually can in real time help to solve the sustainability issues and, not least, the climate issues.
Not paperwork, but real products and services.
But while you're sat in Brussels voting on this, your counterparts are in Brazil pushing through wanting to use less fossil fuels.
Absolutely.
And there is no contradiction.
And you think those two sit together quite neatly, do you?
Yeah, there's no contradiction in that.
Quite the opposite.
Because, of course, we still have the emission trading system.
We still have our 2050 targets and now even 2040 targets voted today.
So what we have reduced today is the reporting obligation for some companies quite a lot of companies but for some companies, it's the paperwork issues regarding this, not the actual emissions.
That has been lowered.
What's the next stage?
Because it's not quite law yet, is it?
So now the parliament has voted our position and the council, that is, the member states, have already adopted their position a couple of months back.
And on Tuesday we start the trialogues, meaning that the parliament and the council will come together and negotiate our position, as it is now two positions.
And we will, before the Christmas, turn this into one position.
And then once that is made, then we have a law on this.
That was Jürgen Warborn there, defending the vote as a necessary step to cut red tape and keep European businesses competitive.
But environmental groups see it very differently.
Listening to Mr Warborn is...
Tom Gellan, EU political campaigner for Greenpeace, an environmental NGO.
He's at COP now and he joins us from Belém.
Tom, what do you make of what's happened in Brussels?
We've been seeing it coming for some time now.
It's part of what they call a simplification drive.
But really what it is, is deregulation.
You stop rules from applying to, as you pointed out, 90% of companies.
If you remove certain obligations they had, for example, on preparing climate transition plans, really that's deregulation.
And it's happening everywhere. just a year after these rules were adopted and came into place.
I'm not really sure how these rules could be blamed for any problems with the EU's growth.
They're just about a year old and were voted in by a majority that is now going back on them.
In terms of coherence, it's particularly bad.
So the idea that was put forward about it saving business, time and money.
If you're saying they've only been in a year, there's not much money and time to have been saved.
Yeah, and they've only been in place for a year, so...
In the reasoning, you also had some references to growth and competitiveness.
And I don't believe that these particular rules that they've amended today had anything to do with problems that you may have in terms of growth and competitiveness, since they've only been here for a year.
I suppose what's happened in the last 12 months, though, is a bit of a shift globally.
Donald Trump is now the president of the United States and he won part of that vote on a drill baby drill mandate, which could put European businesses in a difficult position to compete.
It also means there's a position I'm speaking from the COP where the absence of the US is particularly noted.
And it means there's an absence in leadership on this issue.
And the EU really could have been expected to step in, and it's clearly not what's happening when we see what's happening at home right now.
The vote that happened here on the disclosure and reporting rules, but also the vote on the climate targets for 2040, which wasn't quite as bad but still, when you look at the detail, amounts to the EU reneging on its role as a leader on climate and on climate action and climate ambition.
Do you think it undermines the European Union's credibility really in when it's asking other countries to do more on climate and human rights?
Absolutely.
Absolutely.
Especially here, the focus from the EU in particular is to try and encourage other countries, other parties to the COP, to address the ambition gap, the climate ambition gap.
Obviously if, at the same time, at home, the EU is lowering its ambition, there's obviously a huge problem with credibility.
People know what's happening in Brussels at the moment.
They're not here ignoring what's happening in Brussels.
So the vote really, the timing of the vote is just really bad.
What's the atmosphere in Brazil for this COP?
Does it feel like much progress is being made?
We're still in very early stages.
I think anyone familiar with COPS will tell you that in the first week it's very difficult to know where things will land, what the big takeaway will be from the conference.
I think it's really early to make any kind of predictions, really.
But in terms of the US missing and in terms of delegates from China and India not arriving, does it feel like this COP can actually achieve anything?
Well, we still hope it will.
It's not too late for the EU to sort of step up.
It's not happening at the moment, but it's not too late for it.
And yeah, the US being away is obviously a problem, especially in terms of financing.
But yeah, there's still 10 days to go.
And we hope, I think there could still be some really, really useful outcomes.
That was Tom McGowan there from Greenpeace.
He was speaking to us from Belém in Brazil.
You're listening to World Business Report from the BBC World Service.
Now, Korean shipbuilding is worth around $13.5 billion to the country's economy.
And Donald Trump has recently pledged to increase the number of US ships being built there.
But the industry has also faced controversy, with more foreign workers being brought in and Korean workers claiming that that's pushing their wages down.
Our Korean reporter, Yuna Ko, has been finding out more.
I'm at the eastern part of Ulsan, just an hour drive away from Gyeongju, where 2025 APAC is underway.
This is a heavily industrial city.
There are several gigantic ships under construction, racing high into the sky surrounded by cranes.
The city is also well known as having the world's largest shipyard, operated by HD Hyundai Heavy Industries, which is getting even more attention recently because South Korea and the US discuss on the potential cooperation in shipbuilding sector.
We're going to make ships together in the United States.
Trump has praised the country's shipbuilding capabilities and now wants to take a cue from it.
In the case of LNG carriers, the construction process takes quite a long time because the sequence and procedures have to be carried out very precisely and evenly.
We met Kim Sung-hoon, who worked in shipbuilding business for 25 years.
Inside the company, the atmosphere isn't all that positive these days.
Most of the new workers are migrant laborers now.
Because of that, things have inevitably become more difficult.
The skilled workers left a long time ago, and most of those who remain are in their 40s and 50s.
Foreign workers in this eastern district have doubled in three years, filling the gap left by young locals.
I met with Asan Khan, who's come from Sri Lanka, and Tenuri from Uzbekistan.
I've been in Korea for over eight years and I've worked in the shipyard for more than four.
The number of foreign workers has increased about tenfold.
These days, no matter where you go or look, there are so many foreigners.
Well, it's fine.
The foreign workers come in and take on the tough jobs, and business goes well too.
It's expected to boost sales and revive the slowing city of ships, but locals remain unconvinced.
Yeo Jong-gu is head of the Myeongdeok Village Merchants Association.
Many shops across the city are empty, and our neighborhood is no different.
They say sales used to reach around 30 million won a month.
The fact that even such a good location hasn't been rented out shows just how tough the economy is right now.
Back at the ship, yacht worker Kim Sung-woon told me that the level of pace was driving the influx of migrant workers.
The reason the workforce is now mostly made up of migrant laborers is that wages and compensation for Korean workers were never properly adjusted.
If they had been, we probably wouldn't be in this situation.
It will likely take quite some time before the migrant workers reach the same level of skill as Koreans once had.
And the wages are driving Koreans to move abroad, as Yeo Jong-gu, head of the Myeongdeok Village Merchants Association, explains.
Ulsan developed because of Hyundai heavy industries.
If the technology and skilled workers move abroad, we merchants can't help but feel a sense of crisis.
South Korea's shipbuilding may be thriving, but it's unclear whether the city and its people will see the rewards.
And concerns over pay and job security aren't confined to South Korea's shipyards.
In the US, Starbucks workers have started to strike action of their own, walking out over stalled talks on wages and staffing.
Here's the BBC's North America business correspondent, Michelle Flurry.
It's called Red Cup Day, one of Starbucks' busiest days of the year, when customers get free refillable holiday cups.
But this Thursday, instead of long queues for coffee, some stores could see picket lines.
Unionised baristas in 25 cities plan to strike, pressing for their first labour contract with higher pay and more flexible schedules.
Baristas are tired, they're fed up and they want a fair contract.
They want the fair contract that they've earned and they want the company that they work for to do the right thing and stop union busting.
The action comes as the coffee chain struggles to revive growth.
Global sales rose just 1%, while US sales were flat.
In a statement to BBC News, Starbucks said it was disappointed the union chose to strike rather than return to the bargaining table, adding when they're ready to come back, we're ready to talk.
CEO Brian Nicol recently told our US partner, CBS News, that the company already offers some of the best jobs in retail.
We have the lowest turnover in the industry.
It's below 50%.
We also have the best benefits in the industry and we actually have the best wages in the industry.
Starbucks has been cutting costs, closing stores, reducing staff and selling off much of its China business to boost profits.
Ahead of the walkout, more than 100 US lawmakers, including Senator Bernie Sanders, urged the company to end what they called union-busting tactics and to resume talks.
The two sides aren't currently in active negotiations after discussions broke down late last year.
While the union represents only about 4 of the workforce, the strike could still disrupt operations and complicate the coffee chain's turnaround efforts.
That was Michelle Fleury there, the BBC's North America Business.
Correspondent, let's talk now to Kerry Leahy.
He's an economist at Columbia University in New York.
Thanks for being with us today, Kerry.
We've seen a rise or it appears we've seen a rise in labour activism across the United States over the past.
What?
Two years or so?
Hollywood actors, Hollywood writers, car workers and now Starbucks workers.
Does the most recent strike fit in with the trend that we're seeing?
Oh, absolutely.
I think for the last 50 years labor's been trying to find a way to regather lost shares of total income in the economy.
And they're finally getting some traction in a wide variety of industries, and particularly in Starbucks, which is an ubiquitous product that almost everyone has at least tried once.
That's a perfect fit in with that.
The workers not only want more money and better benefits, but they also want to have more control over their hours.
And they also really, in some ways, want to just get more respect.
You look at the numbers, though, that are actually striking.
It's affecting sort of dozens of restaurants and coffee shops as opposed to, you know, hundreds.
The scale of it seems quite small.
That is correct.
I think you could say that's the tip of the iceberg, and the average employee is probably not yet ready to stop working because they need the money too badly.
But it's not a wholesale change that's going to shut down Starbucks for the next day, week or month.
But I suppose it gets people talking, doesn't it?
We're talking about it now.
And that's not great for Starbucks's reputation.
No, it's not.
And that can be quite important, because what so many people want is not only they want a better job, and they want a job worth respect.
And so that's going to be hard to say that you're being treated well by management if you have very little control over your hours.
Even though you may be paid better than most people in retail, I don't think the highest paid person in retail thinks they're getting paid particularly well in a face forward kind of job.
Kerry Leahy, stay there.
We'll come and talk to you again in just a moment.
The longest US government shutdown is finally over, but restarting everything after six weeks won't happen overnight.
Hundreds of thousands of workers are returning.
Back pay is being processed and the wider economy has felt the strain too.
To look at the broader costs of that, even down to things like the sales of beer.
I've been speaking to Patrick Anderson from Anderson Economics.
This shutdown has been more painful for ordinary Americans than the last one, which was all the way back in 2018 through 2019.
In this case you see auto sales down, electric vehicle auto sales, cratering beer sales down, reduced flights and consumer confidence really in the tank.
So it's definitely hurting ordinary Americans more than the last shutdown did.
So beer sales in particular down 6% in October.
What do you think that tells us about household budgets and confidence?
That tells us that Americans are a little less confident.
They're trading down and things that they consider to be important to them.
And when you see people cutting back on beer, that signals to me that they are losing confidence or watching their wallet.
Will those sorts of sales bounce back now that we've reopened and people are getting paid again?
Well, people haven't gotten paid yet.
And for the taxpayers, remember, taxpayers are paying for all of this.
So American taxpayers are paying for all the elected officials.
They never missed a paycheck.
And the government workers that were furloughed.
They're all getting back pay, both the ones that worked and the ones that didn't.
So for a taxpayer's point of view, this is the worst of all worlds.
They end up paying more and getting less.
And it's no wonder they're upset with their elected officials.
And you mentioned that this has also hit big ticket items as well, the sale of cars.
Is that unusual?
Yep.
The sale of cars are very sensitive, like other, as you said, big ticket items to people's confidence, because they often finance that.
They have to pay loans back over time.
And they just don't want to be splurging on a big purchase when they're worried about where their job's going to be three months or six months or even a year from now.
So you always see car sales. sales dip when people are worried when there's a recession.
And in this case, you see car sales dip.
And it's not just electric vehicles.
With the end of the subsidy for buying them, sales of electric vehicles just tanked in October.
But also other vehicles.
That's another indication to me that Americans are a little bit more cautious, and they're worried in that the shutdown did take something out of the US economy.
So do you think that this is all down to the shutdown or is it down to people being concerned overall about the economy?
There's definitely a concern that Americans have out there, and we've been pointing out some of the weaknesses for some time now.
Jobs weren't nearly as strong as were initially reported in 2024.
Inflation is not completely tamed, still way lower than in many parts of the world, but unacceptably high for Americans.
And tariffs are taking a toll also on both confidence and on consumer purchases and are likely to be causing prices to go up.
So there's things going on in the background.
But also a 43-day government shutdown where taxpayers are still paying everything and getting less, is not good for us here in America.
The Congressional Budget Office has estimated that the shutdown will have caused a 1.5% hit to GDP.
Are you saying that actually the hit could be a lot deeper than that?
I know that congressional budget offices looked at these in the past and I think they try to do a fair job.
But all the indicators we're seeing is that there's actual damage to the private sector portion of the economy.
It's hard to put it in a fraction of GDP because people defer things.
They say they're going to buy a car later, but they don't buy it now.
And some of those people never come back and buy it.
But 1.5% of GDP is a very big chunk of an economy the size of the United States.
And I wouldn't be surprised if that turns out to be a reasonable estimate.
That was Patrick Anderson there from Anderson Economics.
And the uncertainty doesn't stop there.
The White House is now warning that some of America's most important economic data, including the monthly jobs report and inflation numbers, may never be released for October because of the shutdown.
Here's the White House press secretary, Caroline Levitt.
The Democrat shutdown made it extraordinarily difficult for economists, investors and policymakers at the Federal Reserve to receive critical government data.
The Democrats may have permanently damaged the federal statistical system, with October CPI and jobs reports likely never being released.
Kerry Leahy is still with us.
For people listening at home, Kerry.
Has there ever been a moment where government data hasn't been released before?
And does it matter?
Uh, the answer to that is no, we've never seen it happen.
I've been doing this professionally since 1980.
And while we've missed a month or so, we've gotten it back and they've they've released the data with a lag.
So the first thing it's never happened.
Second is it is important because we don't work some some sense flying blind and it's like additional mud on the windshield and you just can't see very well.
And in particular for the marketplace.
Uh, I don't think you're going to know how the economy is actually doing on the employment side till probably the late January.
And between then, if you were at the Fed, what would you do?
You probably want to sit on your hands because you don't know how high inflation is or how low it is.
And you don't know if the economy is actually fading in terms of job creation.
You don't know.
So better yet to hold tight.
How are the markets reacting to this lack of data?
Well, yesterday they liked the fact that they were eventually going to get it, but today they didn't like it because you're going to miss a month, or maybe a little bit more.
And in the case of the unemployment rate, we may get the change in jobs, but we won't get the actual rate.
So I think the market gave them another reason to sell off, because the market's been doing so well for so long.
Yeah, there was a bit of a sell-off, wasn't there, I noticed today.
To, you know, take your profits and sit back and wait.
Now, the White House has been continuing to make trade announcements today as well, haven't they on Friday?
They clinched deals with Argentina, Guatemala, Ecuador, El Salvador.
Looking at kind of grocery products, haven't they?
We've been talking about this on the programme this week.
They've been going up and the government is trying to do something about that.
That's right.
In some of those areas, these are products that we can't produce.
So it's not as if we need to protect them from unfair foreign competition.
So that's another way you can go at a small ticket item like food on the table.
And that is the way.
If there's electricity on and there's food on the table, people are a lot less restive about the future and the present conditions.
Do you expect to see more tariff deals with other countries coming up in the next few weeks?
Oh, absolutely.
I expect something to happen with Brazil and it will never stop.
Thank you so much for your time, as ever, on the programme.
That was Kerry Leahy there, an economist at Columbia University.
That's all we have time for today.
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