Opposition grows against EU sustainability omnibus

More than 150 civil society organisations have joined the call not to reopen negotiations on sustainability regulations as part of its omnibus simplification, warning that this would jeopardise investment and erode the EU’s leadership.

“We are deeply concerned by the current direction of policy making within the European Commission, particularly regarding the introduction of measures that can potentially weaken or undermine previously agreed legislation crucial to the EU’s sustainability goals,” the NGOs, which include Climate Action Network (CAN) Europe and Earthsight, wrote in a statement to the EU Commission today (February 5).

European legislators are holding a closed-door consultation this week on the simplification of regulations such as the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD) and EU Taxonomy – all of which have already been approved by the EU Parliament and are starting to be implemented by companies across the bloc.

The consultation process – which many consider lacking in transparency and stakeholder inclusion – is part of the EU’s attempt to reduce the regulatory burden around sustainability, especially for smaller firms. This attempt is known as the omnibus directive, which is due to be published this month.

Concern over lack of transparency in legislative process

In urging the Commission to stay the course on already negotiated and approved regulations, the NGOs join a growing number of stakeholders including investors, businesses, and 400 French Chief Sustainability Officers. 

“If companies AND investors are coming out against the omnibus – what is the justification for moving so quickly?” asked World Benchmarking Alliance Public Policy Lead Richard Gardiner this week.

He expressed concern that the omnibus consultation is being held behind closed doors and with only companies opposed to the CSDDD and even oil and gas representatives invited.

“This process risks setting an extremely dangerous precedent by the European Commission virtually ignoring their Better Regulation principles. What does this mean for corporate accountability and inclusive policy making?”

This concern is shared by the civil society organisations in their statement: “The current approach, marked by the lack of a thorough impact assessment, absence of evidence, disregard of previous political consensus, and limited transparency and inadequate and business-biased stakeholder inclusion is simply inadequate in view of the nature and potentially far-reaching scope of this Omnibus initiative,” they write, noting that this threatens to erode trust in the EU’s legislative process.

EU Taxonomy recommendations

Meanwhile, the EU Platform on Sustainable Finance has just released a set of evidence‑based recommendations to simplify EU Taxonomy reporting. 

These include: 

• refining the "do no significant harm" (DNSH) assessment and reporting obligations by distinguishing between users (non‑financial vs. financial entities), uses (turnover vs. capital expenditure), and geographies (EU vs. non‑EU exposures)
• introducing a materiality principle applicable to all entities, materiality thresholds for all non‑financial company key performance indicators (KPIs), and a simplified DNSH assessment for the turnover KPI, as well as clarifying the KPIs related to operational expenditures calculation while limiting its mandatory scope to research and development (R&D)
• defining clear guidelines for the use of estimates within the taxonomy framework and establishing safe harbours for financial sector reporting
• allowing proxies and estimates across all assets in the context of the green asset ratio (GAR) and green investment ratio (GIR), while introducing a simplified retail assessment and a reduced denominator for asset classes strictly measurable against the taxonomy
• developing simplified and voluntary approaches for small and medium‑sized enterprises (SMEs), as well as for banks and investors, to integrate the taxonomy into their disclosures

The document is available to download here.