Weakening EU sustainability rules risks Europe’s resilience and competitiveness
As the European Union moves forward with negotiations on the “Omnibus Package”, a proposal originally framed as simplifying sustainability reporting, businesses and investors are sending a united message: Do not weaken the foundations of the EU sustainability framework.
Businesses call for simplification without deregulation
Business for Nature, along with 470+ businesses, investors and organizations are calling for simplification of the reporting rules while emphasizing the importance of preserving the core of the EU sustainable finance framework. Rules on sustainability reporting, transition plans, climate targets and corporate due diligence are a key foundation for achieving the EU’s economic and sustainability goals. Improving their implementation is a priority.
“Businesses are sending a clear message to policymakers: they demand simplification without deregulation. This is essential to protect the long-term resilience and global competitiveness of the EU economy. We urge governments to listen and defend the foundation of the EU sustainability framework which is critical to achieving the EU’s economic and environmental goals.”
Signatories call on EU policymakers to:
Preserve a meaningful scope
Include companies with more than 500 employees in the scope of CSRD, in line with the scope of the Non-Financial Reporting Directive (NFRD) which was adopted a decade ago. This will ensure regulatory continuity.
Maintain double materiality
when simplifying the ESRS, covering environmental, social and governance topics, and ensuring interoperability with international standards and frameworks (including ISSB, GRI and TNFD).
Ensure the value chain cap allows
for the constructive exchange of sustainability information between investors and companies.
Safeguard the core elements of the CSDDD
and maintain risk-based corporate due diligence, in line with the UN Guiding Principles for Business and Human Rights, and OECD Guidelines.
Maintain a requirement to adopt climate transition plans
for companies under the CSDDD, that include science-based targets with disclosures in line with CSRD.
This would ensure regulatory simplification without compromising on the substance of sustainability rules or their significant benefits for businesses across the EU.
The cost of deregulation
Weakening sustainability rules would have direct consequences:
Hindered progress toward more resilient business models: Reporting is not just compliance. It is an investment in resilience: enabling businesses and investors to understand risks, manage dependencies and take meaningful action. Without this knowledge, governments and companies alike face blind spots that threaten long-term stability.
Costly uncertainty and loss of transparency: Standardized, EU-wide sustainability disclosures allow for comparable data, which is a prerequisite for investor confidence, supports risk management and enables value chain transparency, leading to increased EU competitiveness.
Bureaucracy from scope reduction: Reducing the number of companies that must report does not eliminate the need for data. Large businesses, banks and investors will still request information, but without standardized, mandatory frameworks, this will lead to an increased burden for companies. This works directly against the simplification goals of the Omnibus.
Penalties for proactive companies: Companies that have invested early in sustainability reporting and due diligence may be penalized if others are allowed to delay or avoid these requirements. Diluting the rules rewards inaction and discourages ambition.
These rules were designed to ensure transparency, comparability and long-term planning security. They create a level playing field for companies, support innovation and investment and strengthen Europe’s credibility in global markets. Diluting scope, delaying timelines, or removing requirements would undermine these goals and penalize frontrunners.
Businesses need regulatory certainty and continuity to ensure effective implementation and to strengthen the resilience and competitiveness of the European economy.
Ahead of this important vote on 13 October, we urge policymakers to defend the EU’s sustainability rules. Leading organizations have sent a message loud and clear, they should not be ignored.