This week’s EU Omnibus developments
The European Parliament has confirmed it will have its first vote on the ‘stop-the-clock’ proposal on April 1st.
That’s the law currently expected to delay the Corporate Sustainability Reporting Directive (CSRD) by two years, and the Corporate Sustainability Due Diligence Directive (CS3D) by one, while lawmakers negotiate substantive changes to both.
The vote on the 1st will be on whether it should be fast-tracked.
Based on the inaugural debate that took place on Monday, MEPs will be divided on what Parliament’s negotiating position should be on the ‘stop-the-clock’ proposal.
European Council is expected to vote at roughly the same time, which could mean a final decision before the summer break.
There’s understood to be more consensus among Members States than among MEPs, and the Commission’s plan is likely to be approved; although The Netherlands apparently wants companies reporting in the first wave of CSRD to be covered by the delays, too.
In a closed-door Council meeting on Tuesday, Council also discussed the substantive changes proposed to CSRD and CS3D.
According to Responsible Investor, France wants the threshold for companies in scope of CS3D raised from 1,000 employees to 5,000 – bringing it in line with its own due diligence law.
The French accounting standards authority, ANC, published its official position on the omnibus this week, which included a number of warnings.
Firstly, it said, cutting 80% of companies from the scope of CSRD undermines the EU’s goal of provided harmonized corporate reporting across the bloc and may leave financial institutions and data providers asking for more ad-hoc information.
ANC noted that Member States that missed the 2024 deadline to transpose CSRD may now be tempted to wait until it is updated, and revert back to the Non Financial Reporting Directive in the meantime.
Companies in countries that honoured the Commission’s timelines and have adopted the Directive into national law already (including France) will have to apply CSRD in its current form until a decision is made.
This is unfair on companies, suggested ANC.
It also called on EU lawmakers to retain some commitment to providing sector-specific standards.
The European Commission’s advisory body, the Platform on Sustainable Finance (PSF), met in Brussels this week to launch some research on capital flows into the green transition.
Members of the Platform are also wading through the “hundreds” of responses submitted to the recent consultation on changes to the Taxonomy Regulation.
Speaking at an event on Thursday, the chair of the European Insurance and Occupational Pension Authority (EIOPA), Petra Hielkema, welcomed the omnibus proposal, saying the reductions proposed “will really help to free up resources to work on productivity and competitiveness”.
However, she noted that regulators and businesses were currently in “limbo” while they waited for the final changes to CSRD.
Meanwhile, politicians in the US have continued to mount a campaign against the CS3D. This week, REP reported on a proposal from one senior Republican to protect American companies from any overseas due diligence rules.
The bill would even give firms the ability to take legal action against jurisdictions that tried to enforce their laws.