Sustainability Community

The WWF article "Simplification Omnibus: A Ticking Time Bomb for Crucial EU Sustainable Finance Laws" raises concerns about the European Commission's proposed "simplification omnibus" package, expected to be released on February 26, 2025. The package aims to simplify key sustainable finance laws, including the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD).

Key Takeaways:

• Corporate Sustainability Due Diligence Directive (CSDDD): Proposed changes may significantly weaken the directive by reducing obligations for companies to address human rights and environmental risks in their supply chains, potentially undermining global corporate accountability efforts.

• Corporate Sustainability Reporting Directive (CSRD): The revisions could drastically reduce the scope of the directive, limiting reporting requirements to companies with over 1,000 employees, down from the current threshold of 250. This change would exclude many businesses previously covered under the Non-Financial Reporting Directive (NFRD).

WWF urges the European Commission to uphold its Green Deal commitments by focusing on the effective implementation of existing laws, providing clear guidelines, and supporting businesses, particularly smaller ones, to ensure the EU maintains its leadership in sustainable policymaking.

Additionally, investors managing €6.6 trillion in assets have expressed concerns that the omnibus package could create legal uncertainty and jeopardize Europe's long-term economic competitiveness by weakening corporate sustainability disclosures essential for informed investment decisions.

In summary, the proposed simplification efforts risk undermining the EU's sustainable finance framework, potentially favoring large corporations at the expense of environmental protection and human rights.

and here is an analysis from David Carlin, UN's Chief Risks officer on the Omnibus

Can Europe combine sustainability and competitiveness?
Big changes are certainly coming to the EU's sustainability reporting landscape. A leaked draft of the European Commission's Omnibus Proposal suggests major rollbacks in the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy Regulation.

💡 To help navigate these changes, our put together a comparison table-let us know if it's useful!

Here are some highlights of what's being proposed:
🔹 𝗖𝗦𝗥𝗗 𝘁𝗵𝗿𝗲𝘀𝗵𝗼𝗹𝗱 𝗿𝗮𝗶𝘀𝗲𝗱 – Only companies with 1,000+ employees and €450M turnover may need to comply (previously 250 employees, €40M). This scopes out 85% of firms previously covered.
🔹 𝗦𝗲𝗰𝘁𝗼𝗿-𝘀𝗽𝗲𝗰𝗶𝗳𝗶𝗰 𝘀𝘁𝗮𝗻𝗱𝗮𝗿𝗱𝘀 𝘀𝗰𝗿𝗮𝗽𝗽𝗲𝗱 – Industry-specific ESG reporting rules may be permanently shelved.
🔹 𝗗𝘂𝗲 𝗱𝗶𝗹𝗶𝗴𝗲𝗻𝗰𝗲 𝘄𝗲𝗮𝗸𝗲𝗻𝗲𝗱 – Companies only need to assess direct suppliers, not the full supply chain.
🔹 𝗖𝗶𝘃𝗶𝗹 𝗹𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗿𝗲𝗺𝗼𝘃𝗲𝗱 – Under CSDDD, firms won't face legal consequences for failing to meet sustainability obligations.
🔹 𝗧𝗮𝘅𝗼𝗻𝗼𝗺𝘆 𝗿𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴 𝗺𝗮𝘆 𝗴𝗼 𝘃𝗼𝗹𝘂𝗻𝘁𝗮𝗿𝘆 (not directly mentioned in the leak) – Instead of mandatory reporting, firms could opt-in, aligning with corporate lobbying efforts.

The WWF article "Simplification Omnibus: A Ticking Time Bomb for Crucial EU Sustainable Finance Laws" raises concerns about the European Commission's proposed "simplification omnibus" package, expected to be released on February 26, 2025. The package aims to simplify key sustainable finance laws, including the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD).

Key Takeaways:

• Corporate Sustainability Due Diligence Directive (CSDDD): Proposed changes may significantly weaken the directive by reducing obligations for companies to address human rights and environmental risks in their supply chains, potentially undermining global corporate accountability efforts.

• Corporate Sustainability Reporting Directive (CSRD): The revisions could drastically reduce the scope of the directive, limiting reporting requirements to companies with over 1,000 employees, down from the current threshold of 250. This change would exclude many businesses previously covered under the Non-Financial Reporting Directive (NFRD).

WWF urges the European Commission to uphold its Green Deal commitments by focusing on the effective implementation of existing laws, providing clear guidelines, and supporting businesses, particularly smaller ones, to ensure the EU maintains its leadership in sustainable policymaking.

Additionally, investors managing €6.6 trillion in assets have expressed concerns that the omnibus package could create legal uncertainty and jeopardize Europe's long-term economic competitiveness by weakening corporate sustainability disclosures essential for informed investment decisions.

In summary, the proposed simplification efforts risk undermining the EU's sustainable finance framework, potentially favoring large corporations at the expense of environmental protection and human rights.