The European Commission omnibus regulation - friend or foe?
📣 On the 26th of February the European Commission published its Omnibus proposal. Its aim, according to Ursula von der Leyen, was “to simplify reporting and sustainability requirements for companies”. It was also intended, according to the Budapest declaration, to reduce reporting burdens by 25% in the first half of the year.
🇪🇺 An omnibus is a rarely utilised vehicle to pass a cluster of legislation that accomplish the same goal. In this case, three sustainability laws are being reviewed: the corporate sustainability reporting directive (CSRD), the corporate sustainability due diligence directive (CSDDD), and the EU green taxonomy.
📉 The EU proposal removes 80% of companies from the scope of the CSRD rules, effectively exempting all but the largest organisations as reporting will only be required of companies with over 1,000 employees and a turnover of 50 million euros or a balance sheet of more than 25 million euros. Additionally the requirement to report is postponed by two years for companies set to report in 2026 or 2027.
🏫 CSDDD has been updated as well to remove the need to conduct in-depth reviews of adverse impacts from indirect partners in supply chains. It will also simplify the information companies can request from SMEs.
💲 Changes to the EU green taxonomy mean that companies with less than 1,000 employees and a net turnover of up to 450 million euros can voluntarily report should they wish. Materiality threshold changes allow activities that do not exceed 10% of a company’s turnover to be excluded from reporting.
⁉️ Investors and politicians are divided on the omnibus proposal. Some welcome the simplification while others believe that it erodes the transparency required to unlock finance for the green transition and creates unhelpful confusion.
😡 Climate advocates have called the regulation “disastrous”, with a group of civil society organisations, led by Climate Earth, urging the Council of the EU and the parliament to ensure that any amendments seeking to weaken the CSDDD are rejected.
What is your experience with the coming CSRD reporting framework and what do you think about this change of direction within the EU’s climate strategy?
https://lnkd.in/epBnnTNh