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- Global pushback: 11 major companies, including Unilever and Nestlé, oppose changes to EU sustainability reporting laws, citing risks to progress.
- Regulatory concerns: Businesses warn that reopening agreed legal texts could disrupt investments and sustainability initiatives.
- Industry challenges: SMEs and supply chains face difficulties navigating complex reporting standards, demanding clearer guidance.
EU’s Omnibus Proposal Faces Industry Backlash
A coalition of 11 global corporations, including Unilever, Nestlé, Mars, and DP World, has urged the European Commission not to dilute existing sustainability reporting standards through its forthcoming omnibus package.
The omnibus package, slated for release on February 26, 2025, seeks to streamline reporting across EU sustainability laws. However, critics argue it could undermine key directives like the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD).
Nicholas Mazzei, Vice President for Sustainability at DP World, emphasized in an open letter:
“We at DP World want the commission not to go back on committed legislation covering supply chain due diligence (CSDDD) and reporting (CSRD).”
Framework Overview
- CSRD: Aims to enhance transparency and standardization in ESG reporting across the EU.
- CSDDD: Focuses on corporate accountability for human rights and environmental impacts within value chains.
These frameworks are central to EU sustainability efforts but have faced criticism for overlapping requirements and administrative burdens, particularly for SMEs.
“If you’re a small business that employs 10 people, that’s going to be really hard work,” said Yogesh Chauhan, HubSpot’s Senior Director of Sustainability, describing the challenge of calculating emissions and setting targets.
Concerns from Industry Leaders
Companies have invested heavily in preparing for the CSRD and CSDDD. They warn that reopening these frameworks could destabilize implementation and disrupt business planning.
In their letter to EU leadership, the coalition stressed:
- Predictability is critical for investment and planning.
- Current legal texts must not be renegotiated.
- Clear guidance is necessary to navigate existing regulations effectively.
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“Our customers want sustainability that is consistent, rigorous, and easily measurable,” Mazzei added.
International and Regulatory Pressures
The omnibus package has drawn international scrutiny, particularly from the U.S., where lawmakers have criticized the CSDDD’s extraterritorial scope.
Meanwhile, European Commission President Ursula von der Leyen has acknowledged stakeholder concerns:
“The content of the laws is good, we want to maintain it. But the way we get there—the questions we’re asking and the data points we’re collecting—is too much, often redundant and overlapping.”
What’s Next?
The omnibus package may modify reporting deadlines, company scopes, and data requirements, aiming for simplification without sacrificing robustness. Businesses, civil society, and policymakers await further details as the legislative process unfolds.
For companies, staying compliant while preparing for potential changes will remain a top priority. As discussions progress, industry collaboration with the Commission will be critical to achieving workable solutions.
“The Commission’s balancing act between simplification and robust sustainability reporting will determine the future of EU sustainability laws.”
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