Communication from the Commission to the Council and the European Parliament - Progress Report on the Sustainable Development Strategy 2007 {SEC(2007)1416}
Date: 2007-10-22
Institutions: European Commission
Subjects: EU policy, European Union, cooperation policy, environmental policy, report, sustainable development

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 22.10.2007 
COM(2007) 642 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL 
AND THE EUROPEAN PARLIAMENT 

Progress Report on the Sustainable Development Strategy 2007 

{SEC(2007)1416} 

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TABLE OF CONTENTS 

1. 

2. 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

3.5. 

3.6. 

3.7. 

4. 

4.1. 

4.2. 

4.3. 

5. 

5.1. 

5.2. 

6. 

Introduction .................................................................................................................. 3 

Ensuring coherence across EU Strategies and partnership between actors ................. 3 

Assessment of progress made on the key challenges................................................... 4 

Climate Change and Clean Energy .............................................................................. 4 

Sustainable Transport................................................................................................... 5 

Sustainable Consumption and Production ................................................................... 6 

Conservation and Management of Natural resources .................................................. 7 

Public Health................................................................................................................ 9 

Social Inclusion, Demography and Migration ........................................................... 10 

Global poverty............................................................................................................ 10 

Cross Cutting Policies ................................................................................................ 11 

Education and Training .............................................................................................. 11 

Research and Development........................................................................................ 12 

Financing and Economic Instruments........................................................................ 12 

Delivering in partnership............................................................................................ 13 

Communication, Mobilising Actors and Multiplying Success .................................. 13 

Producing Results ...................................................................................................... 13 

Conclusion.................................................................................................................. 14 

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1. 

INTRODUCTION 

In  2005  the  European  Council  set  out  principles  to  guide  Europe  on  a  sustainable 
path of development. These principles include the ongoing need to foster economic 
prosperity based on an innovative, competitive and eco-efficient economy, protecting 
and improving the quality of the environment; promoting equity and social cohesion 
in  solidarity  with  the  rest  of  the  world.  In  2006  the  European  Council  adopted  a 
renewed  Sustainable  Development  Strategy  (SDS)  that  sets  out  a  single,  coherent 
plan  on  how  the  EU  will  more  effectively  live  up  to  these  principles  and  the 
overarching objective of sustainable development enshrined in the Treaty. The plan 
consists of seven key challenges which must be tackled if Europe is to move along a 
sustainable development path and maintain current levels of prosperity and welfare. 
It recognised that SDS goals can only be met in close partnership with the Member 
States and hence set in motion a new process of review and reporting involving the 
Commission and the Member States. 

This  Progress  report  is  the  first  stocktaking  based  on  this  new  way  of  working.  It 
reviews  results  in  moving  towards  the  seven  core  objectives  and  identifies  policy 
initiatives at both EU and MS level that have contributed to these results. Because it 
would not have been possible to show meaningful trends on the basis of one year's 
data, 2000 is taken as a baseline against which progress is measured in the different 
areas.  
This  report  gives  a  first  snapshot  of  the  state  of  play.1  It  shows  relatively  modest 
progress  on  the  ground.  Development  of  policy  initiatives  at  both  EU  and  Member 
States  level  is  more  encouraging.  For  example,  climate  change  and  sustainable 
energy have become top priorities for the EU's domestic and international agendas. 
This far reaching progress on the policy front should bring results on the ground in 
the years to come. There appears to be increasing convergence between the different 
actors on priorities: the EU, Member States, citizen groups, NGOs and business are 
increasingly focusing on the same issues and working to meet the same goals.  

The stocktaking provides the basis for discussions, in the various sector policy fora, 
in the context of follow-up to the 2002 World Summit on Sustainable Development 
and in the SDS coordination framework, on the need to adjust the course or speed of 
policy  initiatives,  with  a  view  over  the  longer  terms  of  readjusting  objectives  and 
recalibrating targets.  

2. 

ENSURING  COHERENCE  ACROSS  EU  STRATEGIES  AND  PARTNERSHIP  BETWEEN 
ACTORS  

One of the key imperatives of the 2006 strategy was to engage all actors – the EU, 
Member States at national, regional and local levels and civil society and business - 
in partnership to focus on the same priorities and to try to ensure coherence across 
policy  areas.  This  is  a  long  term  process  but  experience  in  the  first  year  of 
implementing the strategy demonstrates that it can be done. 

1 

The  analysis  of  progress  on  the  SDS  is,  as  requested  by  the  Council,  based  on  different  sources  - 
national  reports  provided  by  the  national  SDS  coordinators  as  set  out  in  the  EU  SDS,  the  Eurostat 
monitoring  report  based  on  Sustainable  Development  Indicators  (SDIs)  using  the  year  2000  as  a 
baseline and a Staff Working Paper of the Commission as well as an Independent Consultancy study. 

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The review has shown that ensuring coherence across policy areas is a challenge at 
all levels of governance. At EU level, the challenge is to work towards convergence 
of  the  overarching  long  term  objective  of  sustainable  development,  focusing  on 
quality  of  life,  inter-generational  equity  and  the  long-term  viability  of  European 
society,  and  the  medium  term  goal  of  growth,  competitiveness  and  jobs  under  the 
Lisbon strategy. The energy and climate change agenda provides a good example of 
how  these  medium  and  longer  term  strategic  goals  have  converged.  The  Single 
Market  is  another  example,  demonstrating  how  market  opening  when  accompanied 
by social and environmental measures, can promote growth and well being. The EU 
Better  Regulation  programme  has  also  contributed  to  ensuring  coherence  across 
policy  areas  by  requiring  the  systematic  assessment  of  economic,  social  and 
environmental impacts of all major policy initiatives. 

3. 

ASSESSMENT OF PROGRESS MADE ON THE KEY CHALLENGES 

The  following  reviews  the  state  of  play  in  each  of  the  seven  priority  areas  of  the 
SDS. It highlights actions taken at both EU and Member State level to move towards 
policy  goals.  All  the  challenges  are  interlinked;  hence  solutions  in  one  have  an 
impact on the others and are mutually supportive. 

3.1. 

Climate Change and Clean Energy  

The  EU  is  making  progress  in  reducing  greenhouse  gases  (GHG)  and  projections 
indicate that the Community will reach its Kyoto target provided that Member States 
put in place and implement as soon as possible their planned additional policies and 
measures, while the EU economy is growing. 

In  2005,  EU-15  emissions  of  greenhouse  gases  had  decreased  by  2%  compared  to 
their Kyoto base year value. 

Meeting Kyoto targets will require increased reliance on renewable energy sources. 
consumption of renewable energy sources as a whole for the EU-27 increased at an 
average rate of 3.2% per year during the 1990s, growing to 4.1% between 2000 and 
2005.  In  spite  of  this  increase,  because  of  the  relatively  high  growth  rate  of  gross 
inland  consumption,  the  share  of  renewables  in  final  energy  consumption  only 
reached 8.5% in 2005. The average annual growth is insufficient to reach the 2010 
target of 12% in overall consumption. In 2005, the share of biofuels represented only 
1.08% for the EU-27, far from the 2010 target of 5.75% 

There have been significant forward looking policy developments in this area at EU 
level, the most important being the March 2007 European Council’s new Integrated 
Climate  Change  and  Energy  policy  which  sets  ambitious  binding  2020  targets  for 
greenhouse gas (GHG) reductions, renewable energies and biofuels. Other initiatives 
include  an  Energy  Efficiency  Action  Plan  (October  2006)  and  work  on  carbon 
capture and storage.2  

2 

Communication of 10 January "Limiting Global Climate Change to 2 °Celsius: The way ahead for 2020 
and beyond" and "An Energy Policy For Europe". 

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Almost  all  Member  States  have  now  adopted  national  climate  change  strategies, 
either  as  a  separate  strategy  or  as  a  part  of  national  energy  policy  packages.  Some 
have  set  up  specific  offices  and  scientific  councils  to  deal  with  climate  change 
(UK,SE). Some are taking initiatives on taxation. 23 National allocation plans under 
the  Emissions  Trading  Directive  were  adopted  in  2007  reducing  emissions  to 
1903.43 Mt annually instead of the 2101.64 Mt initially proposed by Member States.  

Continued efforts need to be made to meet climate change and energy targets within 
the agreed deadlines. This will require continued attention to making a success of the 
Emissions  Trading  scheme;  promoting  renewables  and  sustainable  use  of  biofuels 
and developing climate change adaptation strategies and plans.  

3.2. 

Sustainable Transport 

Europe is not yet on a sustainable transport path. Energy consumption by transport, 
used  as  a  proxy  for  transport  demand,  grew  at  an  average  rate  of  1.3%  per  year 
between  2000  and  2005  in  the  EU-27,  only  slightly  less  than  the  1.7%  average  for 
GDP over the same period, showing no real signs of decoupling. 

Transport  GHG  emissions  are  still  growing,  with  an  average  annual  growth  rate  of 
1.2%  between  2000  and  2005  in  the  EU-27.  In  2004,  domestic  transport  was 
responsible  for  21%  of  total  greenhouse  gas  emissions  in  EU-15.  It  grew  by  26% 
between 1990 and 2004 whereas emissions from most other sectors decreased during 
the same period. Average CO2 emissions emitted per kilometre from new passenger 
cars have decreased steadily from 2000 to 2004 in the EU-15, at an average annual 
rate of 1.3%, but this rate of change is slower than in the previous decade, and is not 
sufficient to reach the 2008/09 target of 140 grams per kilometre, or the 2012 target 
of 120 grams per kilometre.  

The  objective  of  achieving  a  balanced  shift  towards  environmentally  friendly 
transport  modes  has  not  been  achieved.  The  EU-27  share  of  road  in  inland  freight 
transport  has  continued  to  increase,  albeit  relatively  slowly,  since  2000  to  reach 
76.5%  in  2005.  Passenger-kilometres  by  car  showed  a  relative  stabilisation  in  the 
EU-15,  but  still  reached  84.8%  of  total  inland  passenger  transport  in  2004.  Road 
congestion has been increasing. 

On the positive side, progress has been made on reducing pollutant emissions from 
transport,  with  emissions  falling  by  4.4%  per  year  on  average  between  2000  and 
2004 for ozone precursors, and by 4.2% for particulates.  

Likewise, despite the increase in road traffic, there has been a steady reduction in the 
numbers killed in accidents in both the EU-27 and the EU-15. The EU-15 is well on 
track to meet the proposed target of halving the number of deaths by 2010 compared 
to 2000, but the EU-27 lags slightly behind. 

Key  EU  policy  developments  include  the  Commission's  mid-term  review  of  the 
Transport  White  Paper;  the  Green  Paper  on  Urban  Mobility,  the  adoption  of 
Regulations (known as Euro 5 and 6 standards) setting stricter standards for cars and 
light  commercial  vehicles;  and  Commission  proposals  to  amend  the  fuel  quality 
directive and Directive 2003/96 regarding minimum excise rates for road diesel and 
to include aviation within the EU emissions trading scheme. A railway liberalisation 
package has been adopted and the legal framework for public transport services has 
been revised.  

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Member  States  are  taking  a  range  of  actions  to  move  towards  more  sustainable 
transport and environmentally-friendly transport modes. Only a few Member States 
(FI)  have  transport  strategies.  Others  have  written  sustainable  transport  into  other 
strategies (eg national spatial planning, financing strategies (IE, IT). Other initiatives 
range from lorry tolls (AT) to modernisation of road infrastructure and taxes (BG). 
Some  Member  States  have  adopted  fiscal  measures  to  stimulate  the  reduction  in 
GHG  emissions,  promoting  smaller,  more  fuel  efficient  vehicles  (DK,  BE), 
alternative  fuels  (RO)  and  bio-fuels  (AT,  BG),  providing  exemptions  from  excise 
duty  (DK),  tax  subsidies  (HU)  and  financial  incentives  (IT).  Some  Member  States 
have  implemented  local  speed  limits  and  introduced  park-and-ride  schemes  (AT, 
MA).  Many  are  taking  actions  to  promote  a  shift  towards  environmentally  friendly 
multimodal  transport  modes  (DK,  HU)  both  for  passengers  (CZ)  and  for  freight 
(NL).  Public  transport  initiatives  include  investment  schemes  in  rail  (national, 
regional  and  suburban),  road  charges  and  specific  initiatives  to  promote  bicycling 
(AT,  BG,  DK,  FR,  IT,  UK).  On  road  safety,  some  have  adopted  National  Road 
Safety Strategies (CZ, GR), others have focused on improved inspections of vehicles 
(eg BG) and stringent speed control systems (FR). 

Further  steps  can  be  taken.  Measure  which  Member  States  could  take  include 
promotion of technology for fuel efficiency, greener propulsion and environmentally 
friendly,  less  energy  intensive  modes  of  transport;  tightening  of  pollutant  emission 
standards and GHG intensity for all transport modes; continuing the development of 
noise mapping and measures to reduce transport noise at source; launching action on 
urban  mobility  and  making  optimal  use  of  logistics;  and  development  of 
methodologies for infrastructure charging. 

3.3. 

Sustainable Consumption and Production 

Sustainable  consumption  and  production  is  difficult  to  measure  reliably  on  a  broad 
basis.  That  being  said,  the  headline  indicator  'Resource  Productivity'  reveals  a 
decoupling  of  material  consumption  from  economic  growth.  Furthermore,  more 
businesses  are  reporting  on  environmental  performance  and  there  are  a  rapidly 
increasing  number  of  sustainable  products  and  services  on  the  market.  But,  despite 
this  progress,  there  is  untapped  potential.  For  example,  in  the  EU,  the  average 
material  intensity  is  approximately  1  kg/EUR,  which  is  slightly  less  than  in  the 
United States, but twice as high as in Japan3.The EU could save at least 20% of its 
present energy consumption in a cost-effective manner, equivalent to €60 billion per 
year, or the present combined energy consumption of Germany and Finland. 

The EU has taken a number of initiatives to review, stimulate and foster sustainable 
production and consumption: implementation of the eco-design aspects of the Energy 
Using  Products  Directive;  and,  the  EU  Environmental  Technologies  Action  Plan4; 
and  continued  work  on  an  Environmental  Technologies  Verification  System.  The 
EU,  with  the  support  of  the  Member  States,  continues  to  work  to  improve  on  eco-
labelling and environmental monitoring systems. But, the number of products which 
have an eco-label remains small and there is very limited uptake of EMAS, with the 
number of registered EMAS companies estimated at 5000 (out of a total of roughly 
29 million companies operating in the EU). 

3 
4 

EEA Report, Sustainable use and management of natural resources, n°9/2005. 
http://ec.europa.eu/environment/etap/pdfs/comm_pdf_com_2007_0162_f_en_acte.pdf  

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Member States have a variety of strategies and action plans dealing with aspects of 
sustainable consumption and production. There are a number of publicity campaigns 
and  actions  aimed  at  promoting  sustainable  consumption,  such  as  the  UK  guide  to 
greener  living  and  their  'Every  Action  Counts'  campaign,  school  competitions  in 
schools  promoting  sustainable  consumption  (AT)  and  a  “Green  Responsibility” 
campaign (DK).  

Public authorities across the EU are taking action to stimulate and support corporate 
social  responsibility  (CSR).  In  the  Netherlands,  the  authorities  established  CSR 
Netherlands,  a  foundation  for  the  exchange  of  knowledge  and  experience. 
Companies listed on French stock exchange are obliged by law to include social and 
environmental information in their annual reports.  

Ten Member States have adopted national action plans on green public procurement 
(GPP)  and  some  have  set  national  GPP  targets.  In  the  Netherlands,  public 
procurement  is  to  be  in  100%  sustainable  by  2010.  The  UK  adopted  a  Sustainable 
Procurement  Plan.  The  Swedish  Environmental  Management  Council,  a  company 
co-owned by the central and local government and by the Confederation of Swedish 
Enterprises,  provides  expertise,  training  and  a  web-based  tool  to  public  purchasers 
that want to include environmental requirements in technical specifications.  

Member  States  are  actively  encouraging  business  innovation  and  uptake  of 
environment technology. Joint government and business bodies have been set up to 
strengthen  business  opportunities  and 
the  development  of  environmental 
technologies  (SE,  UK).  Some  Member  States  are  improving  access  to  finance  for 
environmental  technologies,  including  financial  incentives  (UK)  and  awarding 
innovation  prizes  to  companies  (IT).  SI  has  set  up  an  environmental  technologies 
excellence centre. 21 Member States have completed roadmaps for implementing the 
Environmental Technologies Action Plan (ETAP). 

More  can  be  done.  Forthcoming  actions  include  -  implementing  the  Integrated 
Product  Policy  approach;  strengthening  green  public  procurement;  revision  of  the 
EMAS  and  Eco-  label  schemes  and;  fostering  research  into  less  resource  intensive 
products and production processes. 

3.4. 

Conservation and Management of Natural resources 

This  challenge  touches  a  number  of  different  areas.  Progress  towards  reducing  the 
overall  use  of  non  renewable  natural  resources  is  measured  through  Domestic 
Material  Consumption  (DMC).  DMC  has  decreased  by  0.8%  per  year  on  average 
between  2000  and  2004,  reversing  the  trend  of  a  slow  average  growth  of  0.1%  per 
year from 1990 to 20005. Resource productivity has increased by 2.3% between 2000 
and  2004.  There  is  a  certain  degree  of  stability  within  some  elements  of  this 
challenge, including areas such as resource efficiency, forestry and waste generation. 
However, certain sub-indicators for biodiversity, such as trends in some fish stocks, 
show areas of great concern. 

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EUROSTAT 2007 Monitoring report. 

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The  situation  regarding  specific  resources  such  as  water,  air  and  soil,  as  well  as  in 
regard to biodiversity and fisheries is diverse and complex, with complete EU27 data 
often  lacking.  From  2000  to  2003,  most  of  the  Member  States  for  which  data  are 
available  appear  to  have  reduced  the  pressure  on  water  resources  by  reducing  their 
abstraction of groundwater. The situation for surface water is not as clear. There has 
been some progress in improving air quality, with harmful emissions from transport 
–  ozone  precursors,  acidifying  substances  and  fine  particles  –  declining  between 
1990  and  2004.  Soil  quality  continues  to  deteriorate  with  climate  change 
exacerbating  both  greenhouse  gas  emissions  from  soil  and  threats  such  as  erosion, 
landslides, salinisation and organic matter decline. Depletion of fish stocks remains 
problematic.  A  considerable  proportion  of  fish  catches  in  EU-managed  waters  is 
taken from stocks that are already below their safe biological limits, particularly for 
highly valued species (white fish). Trends in demersal and benthic fish stocks, such 
as cod, plaice and sole, remain of concern. Whilst common bird populations seems to 
be  stabilising,  a  recent  study  shows  that  15%  of  Europe's  mammal  species  are 
threatened,  and  a  further  9%  are  close  to  qualifying  for  threatened  status.  27%  of 
European  mammals  have  declining  populations.  Only  8%  of  mammal  species 
populations are increasing.  

Key EU initiatives to foster resource conservation and biodiversity include: ongoing 
implementation of the air quality and water framework directives as well as the Birds 
and Habitats directives; the implementation of the New European Fisheries Fund; the 
Thematic Strategy on Soil Protection; the "Forest Law Enforcement, Governance and 
Trade (FLEGT) Initiative". 

Most  Member  States  have  made  efforts  to  improve  management  and  avoid 
overexploitation of renewable natural resources, in particular in areas of agriculture, 
fisheries,  promoting  biodiversity,  water  management  and  waste 
forestry, 
management.  All  are  actively  implementing  the  waste,  air  quality  and  water 
framework directives. The focus of activities naturally differs from Member States to 
MS  with  the  new  Member  States,  for  example,  more  concerned  with  waste  water 
treatment.  Some  (AT,  DE)  have  raw  materials  action  plans  aimed  at  improving 
resource efficiency. Most have taken specific actions to halt biodiversity loss and to 
designate  Natura  2000  areas.  Performance  in  reaching  biodiversity  targets  and  on 
NATURA  designations  varies  significantly  between  Member  States.  However,  the 
index of sufficiency of sites designated under the Habitats directives reached 93% in 
the EU-15 and 82% in the EU-25, with many Member States reporting that they have 
completed their network or are close to it. 

Forthcoming  actions  should  include  an  overall  strengthening  of  the  integration  of 
biodiversity impacts into policies and programmes (including the CAP health check); 
continued  attention  to  the  implementation  of  the  waste,  air  quality  and  water 
framework directives; completion of the NATURA 2000 network of protected areas 
both  on  land  and  at  sea,  and  ensuring  effective  management  and  financing  of  the 
network;  strengthening  effectiveness  of  international  governance  for  biodiversity. 
The  EU  target  of  halting  the  loss  of  biodiversity  by  2010  and  contributing  to  a 
significant reduction in the worldwide rate of biodiversity loss by 2010 will not be 
met unless substantial additional efforts are made. Member States have a particular 
responsibility  through  improved  planning,  to  reconcile  land  use  and  development 
needs with the conservation of biodiversity and maintenance of ecosystem services.  

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3.5. 

Public Health  

Europeans are not only living longer, but they are living a greater part of their lives 
unaffected  by  serious  health  problems.  Fewer  people  are  dying  from  chronic 
diseases.  There  is  a  continuous  reduction  in  the  incidence  of  serious  accidents  at 
work. 

On  a  less  positive  note,  life  style  illnesses  such  as  obesity  and  mental  illness  are 
becoming an increasing problem. Depending on the country, between 30 and 64 % of 
young males aged between 25 and 34 were overweight or obese in 2003 and between 
12  and  47 %  of  young  women.  The  proportion  of  over-65s  who  are  overweight  or 
obese  is  considerably  higher,  ranging  from  62  to  80 %.  Obesity  increases  risk  of 
Type 2 diabetes, cardiovascular diseases, certain forms of cancer as well as greater ill 
health  due  to  back  pain  and  depression..  Estimates  of  direct  costs  of  obesity  in  the 
EU in the 1990's ranged from 1% of health care expenditure in the Netherlands and 
up to 3.1-4.2% in Germany, and 6% in Belgium.  

Smoking  continues  to  present  health  problems.  26%  of  Europeans  were  regular 
smokers in 2003 - 32 % of males and 21 % of females.6  

Concerning  mental  health,  while  the  suicide  rate  is  decreasing  overall,  60 000 
suicides  occur  annually,  exceeding  the  number  of  Europeans  killed  in  transport 
accidents.  Some  11.5%  of  Europeans  suffer  from  a  mental  disorder.  Mental  health 
problems currently cost the EU at least 3-4% of GDP. The WHO predicts that after 
heart disease depression will be the second global disease by 2020.  

Health  inequalities,  measured  by  differences  in  life  expectancy  between  social 
groups  range  from  4-6  years  among  men  to  2  to  4  years  among  women.  In  some 
countries, these differences are considerably higher (10 years) and in many countries 
the gap appears to have widened over the last 3 decades. Most of the Member States 
which joined the EU since May 2004 have significantly worse health indicators than 
those states which were members before May 2004.  

Whilst most policy action is taken at Member State or local level, the EU has taken a 
number of initiatives of direct relevance to public health - a review of the options for 
general  food  and  nutrition  labelling;  a  White  paper  on  'A  strategy  for  Europe  on 
Nutrition, overweight and obesity related health issues'; an action plan on combating 
HIV/AIDS  within  the  European  Union  and  its  neighbours;  a  proposal  for  a 
framework directive on the sustainable use of pesticides, and a new EU Animal and 
Health Strategy for the period 2007-13.  

Member  States  are  actively  pursuing  initiatives  to  curb  lifestyle  related  diseases, 
pandemic  preparedness,  and  to  improve  the  handling  of  chemicals.  They  did  not 
report extensively on their activities in the area of food and feed legislation, animal 
welfare,  mental  health  or  on  reducing  health  inequalities.  There  is  only  limited 
evidence of good inter-ministerial and inter-sectoral cooperation on public health.  

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EUROSTAT  2007  Monitoring  report  and  Commission  DG  sources  as  well  as  international  sources 
including WHO. 

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In general, the  EU and  Member States need to continue actions to curb the current 
increase in lifestyle related diseases. Continued attention should be paid to health and 
environment  (chemicals  and  air  born  pollution  impacts).  The  persistent  health 
inequalities in Europe warrant further consideration both at EU level and by Member 
States.  

3.6. 

Social Inclusion, Demography and Migration  

A sustainable Europe has to build solidarity between and within generations so as to 
increase the quality of life generally. It is worrying that 16% of the EU population is 
at  risk  of  poverty,  with  children,  single  parents  and  the  elderly  being  particularly 
vulnerable. Integration remains a challenge in many Member States, with non-native 
populations  in  some  Member  States  suffering  from  persistent  high  unemployment. 
Unemployment  rates  of  youth  remain  high  and  a  high  number  of  school  leavers 
present a problem in some Member States. 

On  the  positive  side,  unemployment  is  down  overall  and  there  has  been  modest 
progress on ensuring social and territorial cohesion, although there are considerable 
differences  in  wealth  between  the  richest  and  poorest  regions  of  the  EU.  Social 
protection  systems  are  being  modernised  in  view  of  demographic  change.  Women 
are increasingly participating in the work force and the average age when individuals 
leave  the  work  force  is  increasing.  Member  States  are  reforming  their  pension  and 
health care systems.  

The  open  method  of  coordination  is  the  EU's  main  policy  tool  in  its  fight  against 
social exclusion and poverty. Recent initiatives include a new Council framework for 
social protection and social inclusion; a new roadmap 2006-10 for equality between 
women  and  men,  and  a  Communication  addressing  the  demographic  future  of 
Europe.  A  broad  policy  plan  on  legal  migration  (comprising  a  framework  directive 
and four specific directives) will be implemented in 2007-2009.  

All  Member  States  have  presented  strategies  for  social  protection  and  social 
inclusion  2006-2008  covering  all  three  areas.  The  scale  and  phasing  of  meeting 
demographic  challenges  vary  significantly  between  countries,  as  do  the  policy 
responses.  

Further  work  in  this  area  should  focus  on  making  social  protection,  health  and 
pension  systems  sustainable  in  light  of  demographic  trends.  As  part  of  the  broader 
labour  market  strategies,  the  Member  States  will  need  to  continue  to  implement 
measures  that  will  increase  the  labour  market  participation  of  women,  older  and 
younger  workers  as  well  as  migrants.  Flexicurity,  which  provides  a  balanced 
approach  to  flexible  contractual  labour  arrangements  while  providing  appropriate 
support for the individual, is being developed as part of Member State's response to 
these  challenges.  Member  States  should  also  continue  their  work  on  developing 
comprehensive  lifelong  learning  strategies,  effective  labour  market  policies  and 
modern social security systems. 

3.7. 

Global poverty  

the  Millennium 
There  are  some  encouraging  developments 
Development Goals (MDGs). Global poverty fell by almost 4% since 2000, meaning 
that  134  million  people  were  lifted  out  of  serious  poverty.  The  primary  school 
completion  rate  has  improved  from  78%  in  2000  to  83%  in  2005.  Aid  quality  and 
effectiveness  is  improving.  However,  pressures  on  environmental  sustainability 
remain  high,  notably  access  to  key  resources  such  as  water,  wood  or  arable  land 

in  delivery  of 

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which potentially dramatic impacts for the livelihood of the poorest and could be a 
cause of conflicts. 

On the other hand, 1 billion people still remain in extreme poverty. All developing 
regions  fail  to  meet  the  target  for  reducing  child  mortality  and  one-third  of  all 
children in developing countries are underweight or have stunted growth. Half of the 
people  in  developing  countries  lack  access  to  improved  sanitation.  After  a  low 
around  the  year  2000,  there  was  a  sharp  increase  in  the  EU-15  ODA/GNI 
contributions, resulting in an increase from 0.32% to 0.44% between 2000 and 2005. 
However this growth stalled in 2006, when ODA/GNI fell slightly to 0.43% and the 
EU fell slightly behind on its 2010 intermediate target path.  

There has been progress on policy development at EU level. In December 2005, the 
three EU institutions agreed “The European Consensus on Development”, which puts 
eradication of poverty at the centre of EU development policy. The EU is the largest 
donor  in  the  world  and  its  EU  Africa  Strategy  gives  priority  to  cooperation  with 
Africa  (Joint  EU-Africa  Strategy  2007).  The  EU  is  also  very  active  in  the 
Mediterranean  through  its  neighbourhood  policy  and  in  its  cooperation  with  Latin 
America  and  Asia.  Many  new  policy  initiatives  have  been  taken  to  strengthen  EU 
coordination and coherence of aid.  

Five years after the World Summit on Sustainable Development (WSSD 2002) there 
is only modest progress on some WSSD goals and targets. However, the EU and the 
Member  States  are  committed  to  actively  promoting  sustainable  development 
worldwide  and  ensuring  that  the  EU's  internal  and  external  policies  are  consistent 
with  global  sustainable  development.  This  is  a  very  broad  objective,  and  Member 
States  tend  to  focus  more  on  specific  themes  or  geographic  regions  that  are 
particularly important to them.  

On the volume of aid, it is still possible to achieve the intermediate target of 0.56% 
in  2010  moving  towards  the  MDG  target  of  0.7%  of  GNI  by  2015.  However,  it  is 
clear that significant further efforts are needed to achieve the goal. Many challenges 
remain  –  including:  to  further  develop  the  use  of  general  budget  support  as  an  aid 
delivery mechanism; to tackle the growing challenge of environmental migrants and 
internally displaced persons; to increase Member State commitment to the water and 
forests  initiatives;  to  ensure  that  the  environmental  element  of  sustainable 
development  is  sufficiently  considered  in  the  allocation  of  aid;  to  work  towards  an 
international  environment  governance  system 
that  can  deliver  sustainable 
development  and  to  ensure  that  trade  policy  contributes  to  sustainability.  Further 
cooperation and coordination of aid is clearly essential if the EU is to make a marked 
contribution to achieving the MDGs. 

4. 

CROSS CUTTING POLICIES  

4.1. 

Education and Training 

Education and training are prerequisites to equipping citizens to achieve sustainable 
development goals. The Education and Training 2010 work programme is the policy 
framework  for  European  actions  in  education  and  training,  within  which  Member 
States have agreed on five key benchmarks to be met by the year 2010: reducing the 
number  of  early  school  leavers;  increasing  the  literacy  level  of  15  year  olds,  and; 
boosting the levels of upper-secondary completion. The programme aims to improve 
quality  and  access  for  all.  Increasingly  Member  States  are  responding  to  these 

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challenges  and  are  incorporating  sustainable  development  challenges  in  their 
education  systems.  The  increase  in  EU-25  lifelong  learning  from  7.5 %  in  2000  to 
9.6 %  in  2006  in  the  EU-25,  is  encouraging  in  the  light  of  the  Barcelona  target  of 
reaching 12 % by 2010. 

4.2. 

Research and Development 

Research  and  Technological  Development  is  essential  for  designing  the  innovative 
and  forward  looking  solutions  needed  to  make  real  progress  on  the  seven  key 
challenges.  Eurostat  data  shows  that  investment  in  research  and  development  in 
terms of percentage of GDP stagnated between 2000 and 2005, at 1.9 % in 2005 in 
the EU-15 and 1.4 % in the EU-25, far from the EU target of 3 % of GDP by 2010.  

One  of  the  main  objectives  of  the  Seventh  RTD  Framework  Programme  (FP7), 
launched  in  January  2007,  is  to  mobilise  European  research  for  sustainable 
development.7  In  the  first  year  of  implementation  2007,  40%  of  the  cooperative 
research  actions  called  for  are  directly  or  indirectly  related  to  the  EU  SDS 
challenges.  Two  Joint  Technology  Initiatives,  "Clean  Sky"8  and  "Fuel  cells  and 
Hydrogen"9 have been proposed. Fifteen working technology platforms and fourteen 
ERANETS are also dealing directly with the EU SDS challenges. The Commission 
has  developed  guidelines  on  the  use  of  tax  incentives  and  public  procurement  to 
boost  investment  in  private  sector  research  and  has  revised  its  framework  on  State 
Aid to support R&D and innovation activities.  

Member State reports show that most national research policies are putting R&D at 
the  service  of  the  seven  EU  SDS  key  challenges,  in  a  European  Research  Area 
perspective. 

The  Commission  will  further  pursue  its  efforts  to  put  R&D  at  the  service  of 
sustainable development with a view to exploiting the synergies between the Lisbon 
strategy for growth and jobs and the EU SDS.  

4.3. 

Financing and Economic Instruments 

A wide variety of market based instruments (taxes and emission trading system) and 
policy  specific  market  incentives  (financial  support  to  R&D,  innovation  and 
demonstration on specific issues) are used at EU and Member State level to support 
sustainable  development.  There  is  more  potential  for  the  use  of  market  based 
instruments.  

In March 2007, the Commission adopted a Green Paper on the use of market-based 
instruments for environment and energy related policy purposes and in the course of 
2008  the  Commission  will  review  the  Energy  Taxation  Directive10  and  start  to 
examine  how  to  identify  and  phase-out  environmentally  harmful  subsidies.  The 
Commission  proposed  legislation  to  re-structure  passenger  car  taxation11  and  to 
coordinate taxation of unleaded petrol and gas oil used as motor fuel.12  

7 

8 
9 
10 
11 
12 

Decision  No1982/2006/EC  of  the  European  Parliament  and  of  the  Council  of  18  December  2006 
concerning  the  Seventh  Framework  Programme  of  the  European  Community  for  Research, 
Technological Development and Demonstration activities (2007-2013)-whereas 29 and Annex 1. 
COM(2007)315 final. 
COM(2007)571 final. 
Council Directive 20003/96/EC. 
COM(2005)261. 
COM(2007)52. 

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The  European  Regional  Development  Fund  and  the  Cohesion  Fund  are  major  EU 
financial  instruments  providing  significant  financial  support  for  the  2007-  2013 
period to key areas of the EU SDS such as climate change (€ 9 bn) and sustainable 
transport (€ 36 bn). Cohesion policy applies the sustainable development principles 
of both 'Involvement of citizens' and 'Policy coherence and governance', by including 
all  stakeholders  at  all  levels  of  government,  as  well  as  promoting  coherent  policy 
making across different sectors. 

5. 

DELIVERING IN PARTNERSHIP  

5.1. 

Communication, Mobilising Actors and Multiplying Success 

The  EU  SDS  can  only  work  efficiently  and  effectively  if  it  is  appropriately 
communicated  and  implemented  at  all  levels  of  society,  involving  citizens, 
businesses and government. Both EU and Member States have undertaken awareness 
events and specific issue conferences on topics such as climate change, transport and 
national health towards this goal. 

Citizen  input  (including  NGOs)  represents  a  constructive  and  critical  voice  on 
delivery and implementation. Local Agenda 21 and the European Sustainable Cities 
& Towns Campaign serve as examples. The EESC stakeholder forum in May 200713 
brought  together  groups  from  civil  society,  to  discuss  how  civil  society  itself  can 
continue to develop constructive solutions to climate change.  

Companies and business leaders are beginning to realise the competitive edge that a 
sustainable  approach  to  business  gives  them.  The  Dow  Jones  Sustainability  Group 
Index14 shows that listed companies regularly outperform those not listed. Business 
leaders  are  taking  new  initiatives  -  the  European  Corporate  Leaders  Group  and  the 
European  Alliance  for  Corporate  Social  Responsibility  (CSR),  are  two  such 
initiatives, pioneering new innovative ways to improve the environmental and social 
performance of business. 

5.2. 

Producing Results  

The  2006  SDS  brought  a  new  governance  structure.  In  the  past  year  each  Member 
State  has  appointed  a  SDS  coordinator  and  the  Commission  set  up  a  SDS 
Coordinators  group  which  also  works  with  the  European  Sustainable  Development 
Network (ESDN).  

Eurostat has contributed to monitoring progress on the basis of a comprehensive set 
of  SDIs  which  are  now  better  aligned  with  the  priorities  and  objectives  of  the 
renewed EU SDS15 There are regular discussions with Eurostat on indicators. 

13 
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http://www.eesc.europa.eu/stakeholders_forum/index_en.asp 
Launched  in  1999,  the  Dow  Jones  Sustainability  Index  is  the  first  global  index  tracking  the  financial 
performance of the leading sustainability companies worldwide. 
A list of the reviewed list of SDIs is presented in an annex to the Commission Staff Working Paper on 
the SDS. 

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The EU SDS proposed to institutionalise peer reviews of national strategies in order 
to  better  identify  and  share  good  practices  in  a  process  of  mutual  learning.  The 
Commission has developed a handbook and has in 2007 co-financed the peer review 
of  the  Dutch  NSDS.  This  review  constituted  a  substantial  input  to  the  ongoing 
redesign  of  the  Dutch  SDS  and  had  visible  political  impact.  Further  reviews  are 
planned for 2008. 
The  EESC  set  up  a  Sustainable  Development  Observatory  (SDO)16  in  September 
2006  which  prepared  an  opinion  on  the  Biannual  Progress  Report  of  the  EU 
Sustainable  Development  Strategy,  adopted  11  July  2007.  The  Committee  of  the 
Regions has prepared an Opinion on Education Promoting Sustainable Development 
for adoption autumn 2007. 

Member States are updating their national strategies and planning to bring these into 
line with the EU SDS. 

6. 

CONCLUSION  

The  European  Council  conclusions  of  June  2006  marked  the  beginning  of  a  new 
partnership  between  the  EU,  Member  States,  civil  society  and  business  aimed  at 
working together towards achieving sustainable development objectives.  

This  progress  report  shows  that  progress  on  the  ground  is  modest  but  that  policy 
development  at  both  EU  and  MS  level  has  progressed  significantly  in  many  areas, 
notably  on  climate  change  and  clean  energy.  The  priorities  set  in  the  June  2006 
strategy  remain  valid.  As  the  many  examples  contained  in  this  report  and  the 
accompanying annex show, continued attention needs to be paid to implementation 
in all priority areas.  

16 

http://www.eesc.europa.eu/sections/sdo/index_en.asp 

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