The much-awaited proposal set to alleviate the concerns of many businesses regarding complex green reporting standards is on the horizon. Businesses have expressed frustration over these standards, citing their overlapping nature and the significant investment required for compliance.
However, this proposal could face opposition from environmental and center-left factions, potentially sparking a battle within the European Parliament and among member countries. Maria van der Heide, the head of EU policy at NGO ShareAction, criticized the proposal saying, “If this is confirmed, it’s reckless. It’s like erasing sustainability laws aimed at addressing our most urgent crises – climate change, human rights abuses, corporate exploitation – swiftly and behind closed doors. This isn’t a simplification process, it’s pure deregulation.”
The proposal, expected to be unveiled on February 26, intends to simplify three key green regulations affecting businesses. These include the Corporate Sustainability Reporting Directive (CSRD), which mandates companies to disclose their environmental impact and exposure to climate risk; the Corporate Sustainability Due Diligence Directive (CSDDD), which compels them to identify and address human rights and environmental abuses in their global supply chains; and the EU taxonomy, which determines what constitutes a sustainable investment.
The proposal may also include revisions to the carbon border tax, although this detail was not confirmed in the leaked portion of the proposal.
Based on the leaked draft, the Commission is considering eight amendments to the due diligence rules to substantially dilute them. This includes a suggestion for businesses to only scrutinize their direct suppliers, excluding the rest of their supply chains.
For those curious about investing or interested in the topic, this proposal could have far-reaching impacts on businesses and the way they approach sustainability. But, the overarching goal of this article is not to provide investment advice, but to inform and engage readers on this critical topic.
