Over 200 financial entities, collectively managing assets worth €6.6 trillion, have issued a stark warning to the European Commission.
According to ESG Today, their concern surrounds any dilution of critical sustainability reporting regulations under the EU’s impending “Omnibus package” could undermine the continent’s green ambitions and introduce unwelcome policy uncertainty. This coalition, including heavyweight asset owners and managers along with 49 service providers, fear such changes could disrupt capital flows vital for achieving the EU’s environmental objectives.
The statement, spearheaded by notable sustainability and investment organizations such as the Institutional Investors Group on Climate Change (IIGCC), the European Sustainable Investment Forum (Eurosif), and the Principles for Responsible Investment (PRI), comes in response to the EU Commission’s newly published “Competitiveness Compass.” This roadmap outlines strategies to enhance Europe’s productivity and global competitiveness, notably through reducing corporate administrative burdens, including in sustainability reporting.
A crucial component of the Compass is the proposed “Omnibus” package, expected later this month, which aims to substantially simplify obligations under the EU’s Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), and Taxonomy Regulation. Proposed adjustments include redefining small mid-cap companies to ease their reporting requirements and raising the employee threshold for CSDDD applicability, potentially exempting 80% of businesses.
While the investor group acknowledges the need to streamline the sustainability framework to enhance the EU’s industrial competitiveness and decarbonization, they advocate for maintaining the “integrity and ambition” of existing measures. They argue that full-scale regulatory amendments could destabilize the investment landscape, thwarting efforts to funnel capital into the European Green Deal.
Eurosif’s Executive Director, Aleksandra Palinska, emphasized the necessity of dependable corporate disclosures for investors to effectively contribute to sustainable growth. She highlighted the Draghi report’s identification of an annual €800 billion investment gap in reaching the EU’s industrial decarbonization targets. Palinska warned against premature modifications to the sustainability rules, advocating instead for focused support to help companies implement these regulations effectively.
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