The leaked draft shows a lower requirements for the sustainability reporting of EU

According to information on the reduction of the regulatory pollution that companies are imposed, the European Union is willing to reform a number of laws that were adopted as part of the EU Green Deal, in which the company addressed climate change. With the aim of reducing the reporting obligations, the omnibus simplification package will examine the EU taxonomy, the directive of the corporate reporting and the directive of the company's care for the sustainability of companies. The initial omnibus is to be published on February 26, but a copy was widespread on LinkedIn on February 22nd and strongly distributed borders, which can be asked by SMEs.

As part of the European Green Deal, a number of guidelines were adopted by the EU to force companies to tackle climate change and report carbon emissions. The aim is to comply with the climate entrances of the Paris Agreement, an international contract that was signed in 2015 to prevent climate change. The agreement included the goal of reducing greenhouse gas emissions to NET zero by 2050. The EU dealt with three important legislative measures.

In 2020, the EU passed the EU taxonomy for sustainable activities. Taxonomy has created a classification system for companies and investors to know which activities are considered green or climatic.

This was followed by the guideline for the sustainability reporting of companies in 2023. The CSRD created requirements for companies, THG emissions and other environmental, social and governance measures. For large companies, the general reporting begins in 2025 for the 2024 financial year. Small and medium-sized companies, non-EU companies and companies in high emission sectors will be drawn up and published next year.

The last piece, the guideline of the Corporate Sustainability Due Diligence, was adopted in May 2024. The CSDDD or CS3D created additional reporting requirements as well as legal liability for companies in relation to their supply chain. The intention is not only to regulate the direct acts of a company, but also to assure that their suppliers comply with climate and human rights goals. However, the CSDDD was significantly reset in the last stages. Only determine the approval according to significant changes that reduce the scope.

After an informal meeting of the council in mid -November, Ursula von der Leyen, President of the European Commission, announced her intention to re -renew the regulations for sustainability in order to reduce the burden on companies. She explained that the Council and the Commission will have an Omnibus bill that will “pursue a large approach to reduce what is agreed in a step in the different areas, is too much today. We will look at the Triangle Taxonomy, CSRD, CSDDD. “

The omnibus simplification package is to be published on February 26, provided there are no delays. The process was hired in silence, but there is speculation that the publication is delayed until March due to the lack of consensus on the final proposal. On February 22nd, a partial draft of the package was spread. It is unclear whether it is the final draft or just one of many who are discussed, but insights in the direction of the Commission and the debate about the future of the CSRD.

Proposed changes to the guideline for sustainability reporting of companies

In contrast to the CSDDD, the legislative summary of the changes to the CSRD was not included in the selected selected pages. However, the text of the proposal in relation to the CSRD was included. Most of the changes focus on limiting the effects on SMEs by increasing the threshold of what companies have to report and limits the limitation of the large companies of SMEs.

Increased threshold for sustainability reports for EU companies

The current reporting requirements for the CSRD will be brought into the phase in the next few years. After all, all companies that are based in the EU must report the two of the following three qualifications: net sales of EUR 50 million, assets of € 25 or 250 employees. However, the proposal significantly reduces the number of companies concerned. The proposal changes Article19a (1) to increase the standard to only include companies with over 1,000 employees and an annual net turnover of € 450 million. This aligns it with the existing standards of the CSDDD.

Removes the mandatory sustainability reporting for listed companies

As part of the current text of the CSRD, all companies whose securities are traded in a regulated market in the European Union must report. As part of the proposal, Article 29 (c) 1 is changed, so that the companies listed only have to report if they meet the above -mentioned threshold values. The associated provisions in 19 (a) 7 are also deleted.

Large companies are limited to what they can request from SMEs

With regard to climate change and greenhouse gas emissions, sustainability reporting is divided into three areas. Scope 1 refers to the company's direct greenhouse gas emissions. Scope 2 refers to the greenhouse gas emissions of the energy supplier for the energy that is consumed by the company. SCOPE 3 follows the greenhouse gas emissions along the value chain, including SMEs with which the reporting company does business. SMEs have obtained that the reporting of SCOPE 3 must create costly sustainability reports by default or is unable to do business with large companies. The proposal deals with the change in Article 19a (3) to limit which reporting companies of SMEs can request to the less voluntary reporting requirements.

Increased threshold for sustainability reports for non-EU companies

As part of the current CSRD, some companies that are not based in the EU, but meet certain requirements, must start reporting in 2027 for the 2026 financial year and either 1) have an IN-scope-EU branch that is more nested as 40 million euros, or 2) a large subsidiary that would be independent of each other in the scope. The proposal increases all threshold values ​​to over 1,000 employees and an annual net turnover of 450 million euros in the EU.

In a recently carried out proposal by the European consulting group European Financial Regulatory, which was commissioned to develop report standards for the CSRD, the non-EU companies created the standards of their home country.

Probability The changes to the directive to report sustainability of companies are adopted

The final language of the omnibus simplification package in relation to the directive on the sustainability reporting of companies is still being negotiated. As soon as the following legislative debate can be proposed, it will be seen and change. However, the leaked draft matches the general direction of the EU in this matter, and I assume that they are accepted.