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 big Omnibus news this week was the announcement of Council’s final negotiating position.
It comes as the chief negotiator for European Parliament, Jörgen Warborn, presented his proposals to fellow MEPs.
It provides some sense of the direction of travel for political negotiations, although – while Council’s position is final (we think) – Parliament has a few more months of internal wrangling, with the Warborn’s draft report as the basis.
So, here’s what Member States will fight for when they go up against European Parliament later this year.
CSRD
Council agrees with the European Commission’s proposal to limit the application of the Corporate Sustainability Reporting Directive (CSRD) to firms with more than 1,000 employees. However, while the Commission wants an additional filter of €50m turnover and/or €25m on the balance sheet, Council wants this hiked to €450m turnover.
Warborn is encouraging Parliament to go further to reduce the scope of CSRD, mirroring the €450m demand but bringing the employee threshold up to 3,000.
Accountancy Europe noted that “such thresholds would mean that a third of EU Member States would have less than 10 companies subject to the CSRD”.
Germany would retain the greatest number, according to the trade body’s calculations, with 807.
Under Parliament’s draft proposal, the only other countries with more than 100 eligible companies would be France, Spain, Italy, the Netherlands, Sweden and Denmark.
“Companies with 500-1,000 employees make up a significant portion of the EU economy and are often part of the value chains of larger firms,” said Accountancy Europe.
“Limiting the CSRD scope to companies with more than 1,000 employees, let alone 3,000, would drastically reduce the availability of information on companies’ sustainability performance and financial risks stemming from sustainability developments.”
It argued that the current simplification of the European Sustainability Reporting Standards should be sufficient to reduce the reporting burden on companies in line with the Commission’s stated objective, without slashing the scope of the directive.
On auditors, the Council supports the Commission’s plan to remove the requirement for sustainability statements to have reasonable assurance from 2028, and it wants to introduce certain transition reliefs for auditors assuring non-EU companies.
The final position also argues that companies left in scope of CSRD should have the right to withhold certain information, if it is commercially sensitive or relies on smaller businesses within the value chain providing it.
On which note, Council wants firms with fewer than 1,001 employees to be allowed to refuse to provide detailed information to large customers who need it to comply with CSRD.
CS3D
The Commission wants to retain the existing 1,000-employee/€450m-turnover scope of the Corporate Sustainability Due Diligence Directive (CS3D) – it was already cut drastically during last-minute negotiations last year – but, as expected, the Council and Parliament want it further reduced.
Council wants the thresholds raised from 1,000 to 5,000 employees, and the turnover from €450m to €1.5bn. Parliament’s draft report suggests keeping the €450m turnover level, but increasing to 3,000 employees.
Council backs the plan to delay to the deadline for transposing CS3D to July 2028.