This week’s EU Omnibus developments
The European Commission made another Friday afternoon announcement this week, revealing it had reduced the application of the European Sustainability Reporting Standards (ESRS) for Wave One companies.
While firms in the next phases of the Corporate Sustainability Reporting Directive (CSRD) had their duties delayed by two years in April, those already mandated to report weren’t covered by that ‘stop-the-clock’ directive.
But the new ‘quick fix’ amendments give them their own reliefs.
New reliefs for the biggest companies under CSRD
Originally, Wave One companies were supposed to ratchet up their disclosures in 2026 and 2027, but Friday’s update means they can continue to omit things such as the anticipated financial risks and impacts of environmental issues on their businesses.
The Commission has also extended provisions originally created for companies with fewer than 750 employees to larger Wave One firms, meaning they can omit disclosures on most social topics for the next two years, as well as biodiversity.
On which note, the Taskforce on Nature-related Financial Disclosures (TNFD) wrote to EFRAG on Friday, asking it to consolidate pollution, water, biodiversity and the circular economy into a single “nature standard” , based on TNFD’s indicators and methodology.
Real Economy Progress reported earlier this week on EFRAG’s intention to cut two thirds of ESRS data points in its upcoming revisions, which will go to consultation on July 31st.
Audit costs up 19% at Dutch companies
Dutch corporate governance body Eumedion assessed the CSRD reports of listed companies in The Netherlands, which has not yet transposed the directive, and found that “mostly due to the assurance of the sustainability statements, the total audit fees of the Dutch listed companies increased by – on average – 19%” this year.
“This is an unexpectedly large increase, taking into consideration that the assurance engagement was generally aimed to obtaining a limited level of assurance,” Eumedion noted.
The World Business Council on Sustainable Development also published an assessment of sustainability statements this week, although its analysis was aimed at large global companies.
Norges Bank calls for EU to adopt ISSB
The head of compliance at Europe’s largest investor, Norges Bank Investment Management, has penned an article in the Norwegian press calling on the Commission to “go further” than its original commitment to cut sustainability reporting requirements by 25%.
Carine Smith Ihenacho urged the EU to “align itself with global standards that already work, such as the International Sustainability Standards Board”, according to a translation from the original.
“Countries like Japan, Singapore and Australia already use these. If Europe does the same, companies can deliver one report that works worldwide,” she argued.
New taxonomy advisory body
The Commission is recruiting members from business, finance and civil society for the third iteration of its Platform on Sustainable Finance.
It announced an extension to the body’s mandate this week, so it can continue to advise on the future of the Taxonomy Regulation until 2027.
On Tuesday, key Parliamentary committees are expected to vote on their respective Omnibus-opinion reports, paving the way for their views to be handed over to the legal affairs committee, which is in charge of negotiations.