The European Commission’s proposal to amend key sustainability reporting regulations has sparked concerns among businesses and investors about potential deregulation and its impact on ESG and carbon neutral strategies. President Ursula von der Leyen announced an omnibus plan targeting the Corporate Sustainability Due Diligence Directive (CSDDD), the Corporate Sustainability Reporting Directive (CSRD), and the EU Taxonomy Regulation. These directives are central to defining sustainable investments and ensuring corporate accountability. 

While the initiative is presented as a technical adjustment to streamline reporting and reduce bureaucracy, critics warn it risks destabilizing the regulatory framework. Over 60 major companies, including IKEA, Nestlé, and H&M, have voiced opposition, stating deregulation would undermine the stability required for sustainable investments. Financial institutions like BlackRock and BNP Paribas have echoed these concerns, warning of eroded credibility in corporate ESG disclosures if standards are weakened. 

The timing of the proposal has added to corporate frustration. Businesses have already invested significantly to comply with the CSRD, which most EU nations have adopted into law, with a compliance deadline set for March 2025. Research shows nearly half of European firms are already reporting in alignment with the EU Taxonomy. 

Observers fear the omnibus proposal could lead to political interference, weakening enforcement measures under the guise of simplification. Comparisons are being drawn to the EU Deforestation Regulation negotiations, where late-stage amendments diluted key provisions despite broad support for stronger rules. 

With the Commission expected to unveil the proposal in February 2025, businesses and ESG-focused investors are lobbying policymakers to uphold current sustainability frameworks. They argue that maintaining robust regulations is essential for advancing the EU’s climate goals and preserving its global leadership in ESG practices. A rollback, they warn, could jeopardize progress on corporate accountability and carbon neutrality. 

Sources:  

https://www.edie.net/eu-urged-to-avoid-deregulation-amid-proposals-to-reform-sustainability-reporting-regulations/ 

https://www.ipe.com/news/eu-urged-not-to-make-arbitrary-cuts-to-sustainability-disclosure-rules/10127768.article 

https://www.business-humanrights.org/en/latest-news/eu-more-than-50-companies-call-for-continuation-of-european-green-deal-against-deregulation/ 

https://www.bnnbloomberg.ca/business/2024/11/25/eu-seeks-to-streamline-esg-regulations-amid-growing-backlash/