Brussels' Sustainability Rollback: The Hidden Crisis in European Startups

Jan de Vries · 2026-09-22

When Brussels rolled back key parts of its sustainability agenda, it did more than tweak regulations. It exposed something deeper—a quiet crisis of belief inside many European startups and corporations. Marcus Iles recently dug into this, and his findings should make any founder or executive pause. ### The Gap Between Compliance and Conviction For years, European companies have been told to embrace sustainability. New rules, new reporting requirements, new boxes to check. Many startups did exactly that—they hired sustainability officers, published glossy ESG reports, and added green language to their pitch decks. But here's the uncomfortable truth: a lot of it was compliance, not conviction. When Brussels signaled it might loosen the reins, those same companies quietly stepped back. No protests, no public outcry. Just a silent retreat. That tells you something. If your sustainability strategy only exists because regulators demand it, it was never really a strategy. It was a costume. ### Why This Matters for European Startups The EU Inc proposal—the push to create a unified pan-European incorporation framework—is supposed to make life easier for startups. One legal form, one set of rules, access to the whole single market. Sounds great, right? But if companies can't even stay committed to their own values without a regulator holding their hand, what happens when those rules get streamlined? The risk is that we end up with a race to the bottom, not a race to the top. Iles points out that the rollback didn't just change policy. It revealed a gap between what companies say and what they actually do. And that gap is a problem—for investors, for customers, and for the planet. ### The Real Test of Corporate Belief So what does genuine belief look like? It's not a press release. It's not a sustainability report. It's the decisions you make when no one is forcing you. - Do you choose the more expensive, lower-carbon supplier even when margins are tight? - Do you turn down a lucrative contract because the client's practices clash with your values? - Do you keep investing in sustainable innovation when the regulatory tailwind disappears? Those are the questions that separate companies with a real mission from those just riding a trend. > "Compliance is about avoiding punishment. Belief is about pursuing purpose. The two are not the same, and pretending otherwise is how you end up with a crisis of credibility." ### What Comes Next for EU Inc and Sustainability The EU Inc proposal is still moving forward, and it could genuinely help startups scale across Europe. But it won't magically create better companies. That part is up to the founders and leaders themselves. If you're building a startup in Europe right now, ask yourself: is your sustainability strategy built to survive a rollback? If not, it's time to rethink. Not because Brussels tells you to—but because you actually believe it matters. And if you don't believe it? That's fine. Just be honest about it. The world has enough greenwashed pitch decks. What it needs are companies that know what they stand for—and stand for it even when no one is watching.