Leaked draft shows lower EU sustainability reporting requirements

illuminem summarizes for you the essential news of the day. Read the full piece on Forbes or enjoy below:

🗞️ Driving the news: A leaked draft of the EU’s Omnibus Simplification Package reveals plans to significantly reduce corporate sustainability reporting requirements under the Corporate Sustainability Reporting Directive (CSRD)
• The proposed changes include exempting small and medium-sized enterprises (SMEs), raising the reporting threshold to companies with over 1,000 employees and €450M turnover, and limiting Scope 3 reporting demands on SMEs
• The final proposal is expected on February 26, but delays until March are possible

🔭 The context: The CSRD, adopted in 2023, was part of the EU Green Deal and required companies to disclose GHG emissions and other ESG data
• The Corporate Sustainability Due Diligence Directive (CSDDD), introduced in 2024, added legal liability for supply chain emissions
• Businesses and some EU leaders have pushed back, arguing that the reporting burden is too high, prompting the European Commission to scale back requirements

🌍 Why it matters for the planet: Weakening sustainability reporting rules could reduce transparency and corporate accountability on climate impacts
• Fewer companies will be required to report emissions, making it harder to track progress toward net-zero goals
• Limiting Scope 3 reporting reduces pressure on supply chains, potentially slowing sustainability adoption among SMEs

⏭️ What's next: The final Omnibus Simplification Package must be approved by the European Parliament and member states, setting up a political debate between pro-business and pro-environment groups
• If passed, the changes could diminish the EU’s global leadership in sustainability reporting, affecting investor confidence and climate action efforts

💬 One quote: “We will take a huge approach to reduce in one step, in all the different fields, what is agreed is too much today.” – Ursula von der Leyen, President of the European Commission

📈 One stat: The CSRD reporting threshold would rise from €50M to €450M turnover, reducing the number of affected businesses significantly

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