European Commission streamlines ESG reporting requirements

November 21st, 2024

The European Commission has launched an initiative to simplify ESG reporting by consolidating various requirements into a single regulation aimed at reducing compliance burdens.

The commission’s president, Ursula von de Leyen, proposed combining the “often overlapping” requirements of the Corporate Sustainability Reporting Directive, EU Taxonomy Regulation and Corporate Sustainability Due Diligence Directive into one single omnibus regulation.

Yet, she also noted that the commission is not seeking to drastically change the substantive obligations imposed by these regulations but instead unify them to simplify the regulatory landscape and reduce burden for in-scope companies.

This streamlining initiative, which is expected to come into effect in 2025, also forms part of the EU’s broader strategy to strengthen its competitiveness.

The move follows the introduction of the Budapest Declaration by the European Council, which urged the commission to present concrete proposals to reduce reporting requirements by at least 25% by mid-2025.

Among the 12 points set out in the plan, the declaration calls for a “simplification revolution” aimed at creating a clear, simple and smart regulatory framework for businesses, which would ensure economic prosperity, security, and resilience in the coming years.

The commission is also tasked with including red-tape and competitiveness impact assessments in future proposals, under the recommendations of the declaration.

The Budapest Declaration’s proposals align with a report from the former European Central bank president Mario Draghi, which advocated for a 25% reduction in EU reporting obligations and recommended that all new proposals are subjected to a competitiveness test.

Minerva’s blog focuses on the latest developments in ESG investing and stewardship. Minerva is a global provider of sustainable stewardship solutions with over 25 years of expertise. Minerva empowers investors by providing essential tools, including ESG research and data, enabling them to navigate the intricate landscape of stewardship and proxy voting, whilst ensuring their decisions are well-informed and aligned with sustainable principles.

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