Companies, Investors Campaign to Keep Meaningful EU Sustainability Reporting and Due Diligence Requirements – ESG Today

A coalition of 198 organizations, together with greater than 150 firms and traders, in addition to dozens of service suppliers and sustainability-focused teams introduced at present the discharge of a joint assertion, calling on European policymakers to protect key parts of the EU’s sustainability framework, together with calling to maintain a larger variety of firms within the scope of the CSRD sustainability reporting and CSDDD sustainability due diligence laws than present proposals are concentrating on.

Within the assertion, the group warns that along with forming a key basis for the achievement of the EU’s financial and sustainability targets, guidelines on sustainability reporting, transition plans, local weather targets and due diligence are additionally “conducive to competitiveness and development, in addition to long-term worth creation and subsequent returns for traders.”

Signatories embody power multinational EDF, IKEA retailer Ingka Group, European power firm Vattenfall, telecommunications firm Nokia, insurer and asset supervisor Allianz, asset supervisor La Banque Postale Asset Administration, and monetary companies agency Nordea.

Allianz SE Board of Administration Member Günther Thallinger stated:

“We assist simplifying the CSRD and CSDDD. On the identical time, it’s essential to maintain the important thing guidelines. These guarantee firms present full and dependable information for funding choices and transformative actions. Corporations should nonetheless have a local weather transition plan. Corporations should take steps in keeping with the Paris Settlement’s decarbonisation targets. We are able to obtain efficient reporting in an environment friendly method.”

The assertion is being launched within the context of the European Fee’s Omnibus I initiative, aimed toward simplifying and decreasing sustainability compliance necessities for firms, together with a wide-ranging sequence of modifications to laws together with the Company Sustainability Reporting Directive (CSRD), the CSDDD, the Taxonomy Regulation, and the Carbon Border Adjustment Mechanism (CBAM).

Among the many key modifications proposed by the Fee’s initiative is a dramatic discount within the variety of firms lined by the scope of the CSRD, shifting the regulation to cowl solely firms with greater than 1,000 staff from the present 250 worker threshold, eradicating an estimated 80% of firms from the regulation’s sustainability reporting necessities. Some European lawmakers have proposed even sharper cuts, with a proposal in Parliament suggesting elevating the CSRD threshold to firms with 3,000 staff, which would go away solely round 3,000 firms inside the scope of the regulation.

Equally, whereas the Fee’s proposal didn’t search to alter the CSDDD’s 1,000 worker threshold, the European Council’s agreed place goals to incorporate solely firms with greater than 5,000 staff within the sustainability due diligence regulation’s scope, leaving solely round 1,000 firms to be lined by the regulation. The Council’s place additionally eases the CSDDD’s necessities for firms to implement local weather transition plans.

The Fee’s Omnibus proposal additionally units limits on the main points of sustainability info that banks or bigger firms can request from smaller firms of their worth chains, and requires a big discount within the variety of obligatory information factors required by the CSRD’s underlying European Sustainability Reporting Requirements (ESRS).

The signatories to the assertion, nonetheless, warn that weakening the sustainability guidelines dangers damaging competitiveness and development, and advises that “regulatory simplification will be achieved with out compromising on the substance of sustainability guidelines or their vital advantages for companies throughout the EU.”

The assertion outlines a sequence of suggestions for policymakers, together with a proposal to set the scope of the CSRD to a threshold of firms with greater than 500 staff, in keeping with the CSRD’s predecessor Non-Monetary Reporting Directive (NFRD), and to permit a phase-in interval of two – 4 years, beginning with firms with greater than 1,000 staff. The assertion additionally advises to simplify the ESRS whereas sustaining the double materiality method of the CSRD, and to make sure interoperability with worldwide requirements and frameworks such because the ISSB, GRI and TNFD.

Extra suggestions within the assertion embody guaranteeing that the laws’ worth chain cap permits for a “constructive alternate of sustainability info between traders and firms,” sustaining risk-based due diligence, and retaining a requirement for firms to undertake local weather transition plans that embody science-based targets within the CSDDD.

Click on right here to view the assertion and signatories.