In this edition of ERA Public Affairs newsletter we cover the following topics:

• European Parliament elections
• EU Data Act
• EU Corporate Sustainability Reporting Directive
• EU Corporate Sustainability Due Diligence Directive

If you have comments or questions on the topics covered in this newsletter, please contact [email protected]

2024 EU Elections

Key Outcomes and Implications

The 2024 European elections took place from June 6-9. Millions voted to choose representatives for the European Parliament. Following the elections, newly elected Members of the European Parliament (MEPs) select their leadership, resume unfinished legislation, vote for the new European Commission President, and approve the College of Commissioners. So far, Ursula Von Der Leyen has been re-elected for a second term as Commission President. The College of Commissioners is yet to be approved by the Parliament and formally appointed by the European Council. This article will explore the expected impact of the new European Parliament on the European policy landscape.

The 2024 European elections brought a mix of expected results and surprising shifts across EU Member States. The centrist, pro-European parties, led by the European People’s Party (EPP), maintain a majority in the new Parliament. Interestingly, the election results show a relatively mild anti-EU sentiment, with the trend toward right-wing parties generally considered a reaction against national governing parties in some Member States. The Greens, who performed very well in the 2019 elections, lost a considerably large number of seats, indicating declining enthusiasm among European voters for the Green Deal and other climate policies.

The upcoming term’s political priorities will include enhancing geopolitical strategies, competitiveness in the internal market, sustainability, digitalisation, and food sovereignty. Future political agreements in the European Parliament are expected to be determined on a case-by-case basis, with the increasing influence of right-wing groups set to impact left-right divisions. The new Parliament will have significant implications for EU legislation still in the pipeline, particularly around issues such as sustainability, the circular economy, and the energy transition—key areas for the rental industry. Legislative proposals like the EU Green Deal and initiatives focused on resource efficiency could be revisited, with potentially more tempered environmental ambitions given the reduced influence of the Greens. At the same time, there may be a stronger emphasis on competitiveness and digitalisation, driven by the centrist and right-leaning groups now more prominent in the Parliament. Future regulations on digitalisation and sustainable practices could impact equipment standards, procurement processes, and emissions-related rules in the construction industry.

The recent elections offer an excellent opportunity for trade associations to reassess their strategic objectives in line with the new Commission’s priorities. Regarding the ERA’s public affairs activities, the recent shifts in the political landscape highlight the necessity of working with MEPs from various political backgrounds. Trade associations should prioritize building consensus among MEPs and enhancing local outreach efforts to influence broader EU policies effectively.

In the new political term in the EU, ERA will continue to monitor EU policies on sustainability, circular economy, digital economy and the energy transition. The changing EU landscape offers both challenges and opportunities, making it crucial for industry players to stay informed and engaged with evolving policies.

EU Data Act

Last December, ERA published an article about the new European Data Act. The Data Act, applicable from 12 September 2025 onwards, aims to eliminate data access barriers for consumers, businesses, and public sector bodies. It sets rules on data usage and access within the EU, ensuring fairness and equal opportunities. As an EU Regulation, it directly applies to businesses and consumers. The Data Act aims to enhance after-market services, improve product quality and sustainability, and increase competitiveness. It affects manufacturers of connected products, service providers, and consumers. Companies must make user-generated data accessible to users of connected products and third parties chosen by the user.

In a nutshell, the Data Act aims to:

• Increase legal certainty by clearly defining data usage conditions.
• Prevent abuse of contractual imbalances, protecting SMEs from unfair practices.
• Enable public sector data access for security during emergencies.
• Enhance consumer data portability, allowing safe switching between cloud service providers.

New Obligations

The European Data Act introduces new obligations for businesses regarding data accessibility and sharing while ensuring high protection. Companies in the scope must design products and services for easy user-generated data access, inform users about data handling before contract finalisation, and provide data to users or third parties upon request. At the same time, the Act mandates fair terms for third-party data sharing and includes provisions to protect intellectual property and trade secrets. It restricts data usage to prevent the development of competing products and requires data sharing with public sector bodies during emergencies. Conformity with GDPR, transparency, and dispute resolution mechanisms are emphasised to ensure compliance. This legislation aims to eliminate barriers to data access, enhance market competitiveness, and foster innovation while protecting sensitive business information.

In practice, the Data Act introduces several changes to the equipment rental industry, affecting both OEMs and rental companies. Rental companies will gain free access to equipment data and have the right to access generated data without restrictions imposed by OEMs. The Act also prohibits unfair contractual terms, ensuring that OEMs cannot impose unreasonable conditions on rental companies. Enhanced data portability mandates that products and services be designed for easy data accessibility and transfer, while compliance and transparency measures require OEMs to inform rental companies about data generation and accessibility before contracts are finalised. Data handling must also comply with GDPR to ensure lawful processing and privacy protection.

Opportunities and challenges

The Data Act presents several opportunities, including improved operational efficiency through data-driven decision-making that optimises procurement, rental rates, and fleet management. Additionally, it will foster innovation by supporting the further development of services such as predictive maintenance and performance analytics. Furthermore, increased transparency and service quality due to better access to data can strengthen customer relations, build trust, and foster long-term relationships.

The challenges and considerations associated with the Data Act include navigating privacy concerns by balancing user access rights with the protection of operator privacy, managing the legal and technical complexities of data sharing while safeguarding intellectual property and trade secrets, updating data management practices and systems to comply with new regulations, and crafting contracts that avoid unfair terms and potential disputes with OEMs.

Ultimately, the European Data Act could represent a significant step towards a more transparent and competitive data economy. Businesses need to adapt to these new rules in order to take advantage of improved data accessibility and sharing, ensuring compliance while fostering innovation.

An update on the Corporate Sustainability Reporting Directive‎

In August, the European Commission published a document with a set of frequently asked questions (FAQs), aimed at supporting companies and other stakeholders such as auditors in implementing sustainability reporting requirements of the EU’s Corporate Sustainability Reporting Directive (CSRD).  Under CSRD, companies are required to publish annual reports on sustainability performance. As we informed previously (for example here), the obligation to report starts depending on the size and status of the company. Most large rental companies will have to publish their first CSRD-compliant report in 2026 based on the 2025 financial year.

Key topics covered by the FAQ include the scope of the rules, determination of company size categories for compliance dates, exemptions, and which sets of European Sustainability Reporting Standards (ESRS) to use. It also includes considerations companies should take into account for the use of estimates if they are unable to obtain value chain information, in addition to the sustainability information requests that SMEs should expect to receive as a result of the CSRD.

Earlier this year, ERA published the Handbook on Sustainability in Rental, providing explanations and practical help with the comprehensive legislative framework on sustainability in the rental sector, including a detailed chapter on sustainability reporting.

Also this year, ERA developed the Carbon Reporting Guidance, providing a rental-specific methodology to calculate the company’s carbon footprint, which features among the CSRD requirements.

In the next months, the ERA Sustainability Committee will steer a project to update the ERA Sustainability KPIs framework to bring it fully in line with legislative reporting requirements. This revision will also examine the concept of double materiality, which refers to the necessity of considering two opposing perspectives on sustainability matters. On the one hand, organizations have to report on the impact of their operations on people and the environment. On the other hand, they must report on the potential risks and opportunities of sustainability-related developments. This revision will further help rental companies prepare for the onset of CSRD.

Corporate Sustainability Due Diligence Directive

On Friday, July 5, the Corporate Sustainability Due Diligence Directive (CSDDD) was officially published in the Official Journal of the European Union. The CSDDD will mandate that companies within its scope conduct risk-based human rights and environmental due diligence to identify and evaluate actual and potential negative effects, as well as actively take steps to prevent, mitigate, stop, and address such impacts in their operations and throughout their supply chain. The CSDDD applies to all sectors, including the equipment rental industry. It will be phased in over the next five years, with the first group of companies having to comply from 2027 onwards.

Scope and Applicability

The CSDDD applies to:

• EU companies:
  • EU-based companies with 1,000 employees or more on average and an annual net worldwide turnover of EUR 450 million or more in the last financial year for which annual financial statements have been or should have been adopted (or ultimate parent companies of such a corporate group);
  • EU-based companies with EU franchising or licensing agreements for annual royalties that exceed EUR 22.5 million and an annual net worldwide turnover in excess of EUR 80 million in the last financial year for which annual financial statements have been or ‎should have been adopted (or ultimate parent companies of such a corporate group).
• Non-EU companies:
  • Non-EU companies with an annual net turnover of EUR 450 million or more, generated in the EU in the last financial year for which annual financial statements have been or should have been adopted (or ultimate parent companies of such a corporate group);
  • Companies with EU franchising or licensing agreements for annual royalties that exceed EUR 22.5 million in the EU and an annual net turnover of more than EUR 80 million in the EU in the financial year preceding the last financial year (or ultimate parent companies of such a corporate group).

In-scope companies must ensure that their suppliers ‎(e.g., OEMs, energy suppliers)‎ adhere to sustainability standards. Although the scope of the CSDDD does not cover smaller (non-)EU companies, they could still be impacted indirectly through their relationships with in-scope companies.

Due Diligence Requirements

Concretely, companies within the scope must:

• Integrate due diligence into their policies and business contracts. This also relates to their own workforce (e.g., fair wages, safe working conditions, no discrimination or exploitation). The company’s due diligence policies must be reviewed and updated at least once every two years.
• Identify and address actual and potential adverse impacts on the environment and human rights across the entire value chain. Companies must seek contractual assurances from their direct business partners to ensure their compliance with the company’s code of conduct.
• Provide remediation for actual adverse impacts.
• Carry out meaningful engagement, such as consultations, with stakeholders.
• Monitor and manage the due diligence processes, including establishing notification and complaints procedures.
• Report on the matters covered by the CSDDD (guidelines on reporting to be published by the Commission by 31 March 2027).
• Develop transition plans aligned with the Paris Agreement.
• Assign an authorized representative within the Member States.

The CSDDD creates civil liability for companies regarding environmental and human rights violations within their supply chain. A company cannot be held liable if the damage was exclusively caused by its business partners in the chain.

Interaction with the Corporate Sustainability Reporting Directive

The Corporate Sustainability Reporting Directive (CSRD) requires companies to report on various sustainability factors, including environmental, social, and governance (ESG) metrics. This Directive emphasizes transparency and the need for companies to disclose information that impacts their sustainability performance and strategies. The CSDDD, on the other hand, creates a legal framework for companies to conduct due diligence regarding potential adverse impacts on human rights and the environment within their operations and supply chains. It mandates active steps to prevent, mitigate, and address these impacts.

Both Directives mandate sustainability reporting, although to varying degrees. The CSRD focuses on broader sustainability reporting, while the CSDDD specifically mandates reporting on due diligence processes and measures taken to address adverse impacts on human rights and the environment. In short, the CSRD focuses on reporting, while the CSDDD mainly focuses on behaviour.

Implementation Timeline

Each EU Member State will need to transpose the CSDDD rules into their national laws within ‎two years from the date it enters into force (26 July 2026). The first group of companies (EU companies with 5,000+ employees ‎and EUR 1.5+ billion turnover; non-EU companies with EUR 1.5+ billion turnover) will have to comply from 2027 onwards.‎

The CSDDD will be phased in over five years, based on company size:

[1] Turnover in the last financial year for which annual financial statements have been or should have been adopted.

[2] Average number of employees in the last financial year for which annual financial statements have been or should have been adopted.