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Investors Managing €6.6 Trillion Warn EU Not to Undermine Sustainability Reporting Framework

Investors Managing €6.6 Trillion Warn EU Not to Undermine Sustainability Reporting Framework

Investors Managing €6.6 Trillion Warn EU Not to Undermine Sustainability Reporting Framework
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  • Investors managing €6.6 trillion in assets urge the EU to maintain sustainability disclosure rules.
  • Legal uncertainty from broad regulatory changes could weaken Europe’s economic competitiveness.
  • Targeted refinements, not sweeping revisions, are needed for an effective sustainability framework.

Investors managing a combined €6.6 trillion in assets are calling on the European Commission to uphold the integrity of the EU’s sustainable finance framework. Concerns are mounting that the upcoming Omnibus package, set for introduction on February 26, could lead to disruptive changes in key sustainability regulations.

A joint statement from 200 financial sector actors, including asset owners and managers, warns: “Reopening these regulations in their entirety risks creating regulatory uncertainty and could ultimately jeopardize the Commission’s goal to reorient capital in support of the European Green Deal.”

Threat to Investment and Competitiveness

The Omnibus package aims to streamline regulations, revising laws such as the EU Taxonomy, the Corporate Sustainability Reporting Directive (CSRD), and the Corporate Sustainability Due Diligence Directive (CSDDD). However, investors argue that these regulations are “fundamental cornerstones of the EU’s sustainability policy architecture,” critical for fostering long-term growth.

Related Article: EU Unveils Competitiveness Compass with Plans to Streamline Sustainability Reporting and Boost Green Industry

Aleksandra Palinska, Executive Director at Eurosif, cautioned: “Sweeping changes to these rules, before they are fully implemented, will create regulatory uncertainty and are likely to hinder the contribution investors can make to sustainable growth.”

Aleksandra Palinska, Executive Director at Eurosif

Investors stress that clear and stable regulations are essential for informed decision-making, helping them “manage risks, identify opportunities, and ultimately reorient capital towards a more competitive, equitable, and prosperous net-zero economy.”

Call for Targeted Refinements, Not Overhaul

While supporting regulatory improvements, investors argue that changes should focus on refining technical standards rather than overhauling sustainability rules.

Nathan Fabian, Chief Sustainable Systems Officer at PRI, emphasized: “Wholesale changes to key sustainable finance tools and frameworks during their implementation create uncertainty in the market and risk undermining the ability of economic actors to communicate clearly, setting back economic transition.”

Nathan Fabian, Chief Sustainable Systems Officer at PRI

Proposed refinements include:

  • Streamlining technical standards based on industry feedback.
  • Providing sector-specific implementation guidance.
  • Ensuring alignment between EU and international reporting standards.
  • Leveraging digital solutions to ease reporting burdens and improve data accuracy.

Sustainability Data Already Driving Investment

The statement highlights that transparency rules are already delivering results, with European companies reporting €440 billion in Taxonomy-aligned capital expenditure by 2024—a figure expected to grow.

Alexander Burr, ESG Policy Lead at Legal and General Investment Management, stated: “An efficient way to bring coherence and interoperability to the framework would be through the technical standards. Providing clarity through the technical standards would maintain the Commission’s leadership.”

With the EU facing an annual investment gap of €750-800 billion, investors warn that weakening sustainability disclosures could undermine initiatives like the Clean Industrial Deal, designed to enhance Europe’s net-zero industry competitiveness.

Push for Stability in Sustainable Finance

Héléna Charier, Head of SRI Solutions at La Banque Postale Asset Management, reinforced the need for regulatory stability: “Corporate sustainability disclosure rules are essential to enabling investors to efficiently allocate capital towards the most sustainable companies and projects, financing the EU’s energy transition while also identifying and managing sustainability risks.”

The investor-backed intervention has been shared with Commission President Ursula von der Leyen and key EU policymakers, urging them to maintain a robust and predictable regulatory framework for sustainable finance.

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