The European Commission’s proposed Omnibus Simplification Package would slash the number of businesses impacted by regulations like the CSRD and EU Taxonomy
The European Commission has announced a new package of proposals aiming to “simplify EU rules, boost competitiveness and unlock additional investment capacity”.
“This is a major step forward in creating a more favourable business environment to help EU companies grow, innovate and create quality jobs,” the Commission stated.
However, critics said that limiting the Corporate Sustainability Responsibility Directive (CSRD) would be a backward step for EU sustainability and raised questions over how the EU’s Green Deal could be achieved.
The CSRD requires companies to disclose information about their environmental and social impact, to boost sustainability and increase transparency for investors and consumers.
Robin Hodess, CEO of the Global Reporting Initiative (GRI), commented: “If the Commission aims to make European business more competitive, then cutting the ambition of the CSRD is a backward step, given the crucial importance of sustainability data in driving innovation and investment into Europe. It also raises serious questions about how to achieve a climate-neutral EU as the cornerstone of the Green Deal.”
The CSRD is currently designed to cover around 50,000 companies with more than 250 employees. By only applying them to firms with more than 1,000 employees, the proposed changes would remove around 80 per cent of companies from the scope of CSRD. The same exemption would be applied to the EU’s “taxonomy”, which defines what can be considered a climate-friendly investment.
Ursula von der Leyen, president of the European Commission, announced: “Simplification promised, simplification delivered!”
The EU commission argued that the proposals would bring savings of around €6.3bn and mobilise investment capacity of €50bn.
“By bringing our competitiveness and climate goals together, we are creating the conditions for EU businesses to thrive, attract investment, achieve our shared goals – such as the European Green Deal objectives – and unlock our full economic potential,” the Commission said.
“These proposals will reduce the complexity of EU requirements for all businesses,” it continued, “notably SMEs and small mid-caps, focus our regulatory framework on the largest companies which are likely to have a bigger impact on the climate and the environment, while still enabling companies to access sustainable finance for their clean transition.”
However, the GRI urged the Commission to continue showing global leadership on the issue of sustainability, not least for the bloc’s economy.
“Promoting sustainable business is a strategic imperative and an area in which Europe has long shown global leadership,” the GRI stated. “The Commission, EU institutions and Member States must maintain the ambition of the CSRD during the upcoming negotiations. Only then can they enable effective reporting that meets the needs of stakeholders, including investors, and supports a sustainable and resilient EU economy.”
The legislative proposals are now set to be submitted to the European Parliament and Council for their consideration and adoption, with EU member states and Parliament still in a position to block the changes.
