This week’s EU Omnibus developments

A rundown of who is saying what this week, and what more we know about plans to revise Europe’s sustainability rules

The chair of the European Securities and Markets Authority (ESMA) warned EU lawmakers against aggressively cutting the Corporate Sustainability Reporting Directive and the Taxonomy Regulation this week.

Speaking at a conference on sustainability standards, hosted by the International Sustainability Standards Board, Verena Ross issued a “challenge” to the argument that disclosure requirements put companies at a competitive disadvantage.

“Sustainability disclosure is as crucial as ever, and does not hamper competitiveness, but can in fact contribute to it,” she said, but conceded that “sustainability disclosures must be calibrated right for this positive relationship to manifest”.

Paring back the number of data points against which businesses must report, or reducing the entities in scope of the requirements, won’t decrease demand for the information from investors and other stakeholders, Ross argued.

“We will simply regress to a system where companies receive repeated bilateral data requests,” she said, adding that such voluntary, non-standardised disclosures would not be as useful.

“While sweeping reductions in disclosure requirements will on paper lighten administrative costs, in reality, it’s likely that companies will still incur many of these costs through having to prepare bilateral disclosures.”

Wave One reports and ESRS

So far, CSRD has yielded a wide variety of sustainability statements, but with “good comparability of results at a high level”.

That’s according to an assessment of 656 of them, published by EFRAG this week.

It found that the average length of sustainability statements stood at 115 pages, with around a quarter coming in at fewer than 70 pages.

Southern European firms tended to issue longer reports than their Northern European counterparts.

Six topical standards were deemed material by most firms, according to the analysis: Climate Change (98%), Own workforce (99%), Business conduct (93%), Consumers and end-users (68%), Circular economy (65%), Workers in the Value Chain (63%).

Less than 5% of companies found Microplastics, Rights of indigenous peoples and Biodiversity-Animal Welfare material.

EFRAG confirmed during a meeting on Friday that its proposal for simplifying the European Sustainability Reporting Standards will see mandatory data points cut by 58%.

Including voluntary data points, the total reduction will be 66% under the plans.

A consultation is slated to begin next week.

Environmental Omnibus 

Another consultation is already open, with a call for evidence being launched on Tuesday for the latest Omnibus package.

First announced in April, the Environmental Omnibus will seek to streamline green legislation, although it is not yet clear which laws will be covered.

“The Commission is seeking stakeholder input on how to make EU environmental laws faster, easier and cheaper to implement, thereby making life easier for EU businesses,” says the consultation.

“Measures can include streamlining administrative obligations, eliminating duplicate reporting requirements, promoting further digitalisation of reporting, and addressing permitting challenges.”