Reporting First, Sustainability Second?

Europe’s ambition to lead the global green transition is commendable, but the road to sustainability must be paved with pragmatism, global ambition, industrial logic, and trust. As Europe’s largest manufacturer of ventilation equipment, with deep industrial roots across the European Union and a strong presence in global markets, Systemair has been supporting the EU’s sustainability agenda since its beginnings. In fact, we have witnessed its remarkable transformation first-hand across all our HVAC segments and markets. 

Yet increasingly, well-intended regulations risk undermining the very competitiveness needed to realise Europe’s green goals.

There is a need to rebalance the equation: prioritising performance over paperwork. In short, reporting first, sustainability second, is not a viable model.

From Pioneer to Paperwork: How Sustainability Risks Evolving

The EU’s sustainability policy has come a long way. For example, the early stages of the Ecodesign and Energy Labelling frameworks were built on a logic of continuous energy efficiency improvements—clear and ambitious targets, harmonised implementation, and tangible results. European manufacturers have successfully responded with innovation and investment. This has significantly strengthened the global position of European technology, with EU standards often serving as reference models worldwide.

However, today’s EU framework is becoming increasingly dominated by reporting obligations, especially around lifecycle metrics. Environmental Product Declarations (EPDs), for example, are becoming a baseline requirement in the building and construction sector, not only in public procurement, but also increasingly across private sector buyers. While positive in principle, applying the wrong category of EPDs will become counterproductive in practice. This depends on the type of Life Cycle Assessment (LCA) applied — particularly when going beyond the so-called ‘cradle-to-gate’ approach — and on the number of EPDs required to meet the demands of different markets, formats, and regulatory frameworks. 

One of the main reasons for this fragmented EPD landscape is the slow progress by EU policymakers in developing harmonised policy frameworks.

For example, delays in revising many Ecodesign regulations have prompted Member States, such as France, to introduce their own sustainable product rules and verification schemes. The lack of harmonisation within the EU increases complexity and administrative burden, without benefiting the environment or the green transition.

For complex technical products, such as HVAC systems, EPD preparation can cost thousands of euros and weeks of documentation work per variant. Despite high costs, EPDs remain largely non-harmonised. What should be an instrument for sustainability is becoming an industry of administrative compliance.

As things stand, European manufacturers are investing increasingly more time and resources into reporting on sustainability than into delivering it. In an increasingly competitive global economy, such an imbalance could cost us dearly.

A Fragmented Internal Market Still Holds Europe Back

The still persistent fragmentation of the Single Market in some crucial areas, such as the building sector, further compounds the challenge. After decades of integration, we still face national interpretations of EU rules, divergent enforcement practices, and a patchwork of market surveillance mechanisms, or lack thereof. We see, for example, how some Member States attempt to categorise energy-related products as construction products, enabling them to use national product safety verifications to introduce protectionist measures. 

As Systemair’s own experience has shown, while our HVAC products are fully compliant with harmonised EU regulations, they can still face re-testing or re-certification when sold in some EU Member States due to national gold-plating or lack of mutual recognition. A notable example among many is the Belgian “EPD regelgeving”.

In a global race where scale, agility, simplicity and capital allocation matter, European industry cannot afford to be distracted by internal frictions and divisions. According to the IMF, internal market barriers on Europe’s own manufactured goods are equivalent to a substantial 44% tariff — rising to as much as 110% for services. The Letta Report rightly quantifies that the incomplete Single Market is costing Europe around 10% of potential GDP. That is growth we cannot and must not leave on the table.

Bureaucratic Ambition Isn’t Industrial Strategy

While we fully believe in the value of environmental transparency, reporting frameworks must benefit the European industry, being fully harmonised, proportional, pragmatic, aligned with industrial realities and global ambitions. Policymaking must distinguish between essential data that guides sustainability and excessive, and often duplicated, reporting that merely satisfies theoretical completeness while hindering the implementation of sustainability initiatives. The focus shifts from managing outcomes to managing data.

Too often, we see policies designed from a zero-risk mindset, introducing layers of documentation, overlapping standards, and audit mechanisms without streamlining and properly monitoring what already exists through effective market surveillance. Overregulation signals mistrust in the capacity of industry to deliver the needed green transition.

Think European, Act Global

There is yet another dimension too often overlooked: global relevance. The innovations that Europe mandates—higher energy efficiency, better circularity, lower emissions—must not only serve our internal market but thrive in other geographies. This should be built into policy from the start.

European manufacturers are producing some of the most sustainable, high-quality products in the world. However, without international regulatory alignment and effective EU trade promotion — including, for example, a thorough response to recent global movements to roll back decades of sustainability evolutions — and thorough market surveillance within the EU’s Single Market, these advantages risk being undermined by cheaper, lower-standard imports.

To lead the green transition, Europe must not only invent and require innovation—it must ensure those innovations are recognised and adopted globally.

This means focusing on coherent and simplified EU, and not Member State-driven, regulatory frameworks, aligning and standardising EPD and LCA schemes in a harmonised European law, negotiating mutual recognition agreements, and designing product policy that enables—not impedes—export growth. Sustainability cannot be confined within borders. It is and must be a competitive asset on the global stage.

A Pragmatic Policy Reset

Europe’s industrial and sustainability agendas must converge. As the Draghi report on competitiveness rightly outlines, the EU’s future hinges on delivering a coordinated, innovation-led, and globally competitive strategy. For the HVAC and broader building technology sector, this requires:

1. Completing the Single Market, prioritising mutual recognition and harmonised product enforcement across all Member States—overcoming protectionist schemes such as the PEP Ecopassport in France or differing national calculation methods for the energy performance of buildings. After all, harmonisation drives growth — not the other way around.
2. Streamlining sustainability reporting, particularly around EPDs, Digital Product Passports (DPP), and lifecycle declarations — prioritising simplicity and value over volume of data and avoiding duplication of information requirements over multiple platforms.
3. Simplify requirements from an industrial perspective to enable product innovation and global competitiveness, instead of deregulating Europe’s climate and energy objectives – simplification can go hand-in-hand with ambitious sustainability objectives, while deregulation creates loopholes and hinders business growth within Europe. 
4. Thinking globally, ensuring that the global European sustainability leadership enhances—not inhibits—our trade and industrial positioning.
5. Unlocking innovation and investment by simplifying funding instruments and promoting EU-wide, demand-driven initiatives, ensuring better use of tools like Horizon Europe and reducing fragmentation across Member States. Let industry drive innovation through economic and competitive incentives, not through excessive regulation.

Conclusion: Let Industry Breathe

At Systemair, we embrace our role in driving sustainable building transformation in Europe and across the globe. We support bold targets, strong climate ambition, and transparent product impact assessments. And we are not alone in this: Eurovent, the key European industry association representing HVACR manufacturers, has issued a clear manifesto urging the EU to maintain ambition on environmental targets while simplifying legislation and advancing a European industrial strategy.

Ambitious sustainability goals and streamlined regulation can go hand in hand — deregulation and loopholes would undermine climate targets and weaken Europe’s long-term manufacturing strength.

We therefore call on policymakers to build frameworks that empower, not entangle.

Sustainability must be more than a compliance exercise. To meet Europe’s green goals, we must trust industry and keep it globally competitive. That means, amongst others, speeding up regulatory processes while spending less time on reporting—and more time on making sustainability real.

Without a harmonised EU sustainability strategy, execution lacks direction. Yet without execution, even the best strategy is of no use.