EU To Host ‘Simplification Roundtable’ On Reducing Sustainability Reporting

Following calls to reduce the regulatory burden imposed on businesses, the European Union is poised to reform a series of laws passed under the EU Green Deal that required businesses to address climate change. With a goal of reducing reporting requirements, the Omnibus Simplification Package will look at the EU Taxonomy, Corporate Sustainability Reporting Directive, and the Corporate Sustainability Due Diligence Directive. The result could reshape the international landscape for sustainability reporting, but little is known about the proposal. The European Commission has announced a Simplification Roundtable with stakeholders on February 6.

As part of the European Green Deal, a series of directives were passed by the EU to force businesses to address climate change and report carbon emissions. The goal is to comply with the climate initiates of the Paris Agreement, an international treaty signed in 2015 to prevent climate change. The agreement included a goal of reducing greenhouse gas emissions to net zero by 2050. The EU addressed this through three key legislative actions.

In 2020, the EU adopted the EU Taxonomy for Sustainable Activities. The Taxonomy created a classification system for business and investors to know what activities are considered green or climate friendly.

Then followed the Corporate Sustainability Reporting Directive in 2023. The CSRD created requirements for businesses to report GHG emissions and other environmental, social, and governance actions. For large companies, general reporting begins in 2025 for fiscal year 2024. Small and medium sized companies, non-EU based companies, and companies in high emission sectors will see reporting requirements being drafted and released over the next year.

The final piece, the Corporate Sustainability Due Diligence Directive, was adopted in May 2024. The CSDDD, or CS3D, created additional reporting requirements, as well as legal liability, for companies in relation to their supply chain. The intent is to not only regulate the direct actions of a company, but also assure their suppliers comply with climate and human rights goals. However, the CSDDD faced significant pushback during the final stages. Only finding approval after significant changes that reduced the scope.

Following an informal meeting of Council leadership in mid-November, Ursula von der Leyen, President of the European Commission, announced her intention to revamp sustainability regulations to reduce the burden on businesses. She stated the Council and Commission will have an omnibus bill that will take “a huge approach to reduce in one step, in all the different fields, what is agreed is too much today. We will look at the triangle Taxonomy, CSRD, CSDDD.”

Since November, speculation over the content of the bill has enthralled both businesses interests and climate activists. However, most of the development has been conducted behind closed doors. A discussion at the January 21 meeting of the Economic and Financial Affairs Council (ECOFIN) shared little additional information.

Now, the European Commission has announced a Simplification Roundtable to be held on February 6. The agenda provides some insight as to the direction. The meeting begins with a keynote speech by Valdis Dombrovskis, the European Commissioner for Implementation and Simplification. Discussion will then move through the CSRD, Taxonomy, and CSDDD. Focus will be placed on Small Mid-Caps and paperless reporting, before closing on the Carbon Border Adjustment Mechanism.

While the agenda provides a direction for the discussion, the participant list has concerned climate activists, with some noting that key climate groups are not included. Additionally, the list leans heavily towards business interests, with a noted focus on the inclusions of SMEs.

As the meeting appears to be closed door, any insight into the content of the Omnibus Simplification Package will only be revealed second-hand. Ultimately, we may not know the full content of the bill until it is officially published on February 26.

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The list of participants.

Social Partners: Business Europe, SME United, SGI Europe, ETUC, and Industriall.

Trade Associations: FIEC, CEEMET, EBF, EACB, ESBG, Insurance Europe, European Builders Confederation – EBC, CEFIC, European Express Association, Eurochambres, Eurocommerce, AmCham EU, ACEA, CEPI, ERT, EURATEX, ORGALIM, European Issuers, European Association of Public Banks, EFAMA, IOGP, IDW, and FUELS Europe.

NGOs: BEUC, Finance Watch, Better Finance, WWF, T&E, E3G, Fank Bold, Friends of the Earth Europe, ShareAction, and Human Rights Watch.

Practitioners: ENI, BBVA, Deutsch Bank, ARNOLD print service (SME), Elektro Ehinger GmbH (SME), Haulotte, DHL, Airbus, Intesa SanPaolo, Diageo, EBC (SME), Bouwunie (SME), Total Energies, NWB Bank, Ineos Group, Exxon Mobil Europe, Proviron, Moeve, Pepsico, Michelin, BMW, ENGIE, Royal Philips, Iperwood SRL, Volkswagen, ICOP, Societe Generale Group, Rabobank, Caixabank, Generali Group, and Allianz SE.