The European Commission (EC) proposed Wednesday to simplify corporate sustainability rules, claiming complex regulations and “red tape” are preventing EU businesses from staying competitive and hampering economic investment. The main proposal is to delay the application of the new Company Sustainability Reporting Directive (CSRD) Act for applicable companies and other sustainability laws that form part of the European Green Transactions.
The EC proposal forms part of this crosscut. The proposal was made by Commissioner Maria Lewis Albuquerque and Commissioner Bardis Dombrowski in discussions throughout the European Economic and Social Commission (EESC). In the discussion, Dombrovskis said:
Our commitment to ensuring green transitions remains unshakable, but we must acknowledge that this has taken the price and has created a significant regulatory burden on people and businesses. When we take stock, we show that the accumulation of this rule and its increased complexity limits our economic potential and prosperity.
Dombrovskis proposes “free” 80% of companies “under the scope of CSRD,” delaying the application of corporate sustainability due diligence, raising its mission to “adopt sector-specific standards,” amending the EU classification rules for sustainable investment, and “changes in unstandardized simplification.”
The European Climate Law, well known as the EU Green trading plan, was approved by the EU Parliament in 2021. By 2050, we have developed a comprehensive plan to help the EU achieve climate neutrality. EC has announced the “Competitive Compass” framework. The EU said “multiple-cut-away” actions will be used to achieve this, such as “simplifying the regulatory and administrative burden of businesses.”
Organizations such as Businesseurope and the EU Employers Group are welcoming competitive compasses and celebrating the initiative with a focus on reducing the burden of innovation and regulations. Other political parties, such as EU socialist and Democratic president Iratxe García, have criticised the initiative that they have failed to properly address the issue and undermine green deals.
