Latest news with #OmnibusSimplificationPackage
Forbes
12-05-2025
- Business
- Forbes
Mixed Sustainability Messages Create Uncertain Path For Businesses
Life seemed much easier for business leaders when they could just complain about what they perceived to be excessive and inconsistent sustainability regulations. Complex, global disclosure requirements – some mandatory, some voluntary – elaborate supply chain due diligence processes, greenhouse gas emissions reporting: they all seemed challenging enough. But when the regulators themselves started changing, editing, simplifying and clarifying already agreed upon sustainability mandates, and adjusting course on associated policy, that's when things got really complicated. In the European Union (EU), for example, recently leaked documents have revealed continued disagreement among EU Member States over key details of the Omnibus Simplification Package, an initiative launched earlier this year to harmonize and simplify existing sustainability mandates. The mere introduction of the simplification initiative caused a stir as most of the world thought the rules were already finalized. Now that they've been reopened, the drama has only intensified. Meanwhile, the European Financial Reporting Advisory Group (EFRAG), the organization appointed to develop the original technical guidance and now working on the revision of the European Sustainability Reporting Standards (ESRS) as part of this Omnibus Simplification Package, recently had its work plan rejected as some Council members have expressed a lack of confidence in its implementation plans. In the U.S., where the Environmental Protection Agency (EPA) has launched its biggest ever deregulatory action and the Securities and Exchange Commission has abandoned its plans to introduce climate disclosure rules, the situation for businesses has become even more complicated. While some companies have seized on the changing political winds to distance themselves from corporate sustainability initiatives, numerous investors and other stakeholders have started to push-back and are still demanding clarity on climate goals and other sustainability commitments. Suddenly, it seems that navigating sustainability has become less about following a straight-line path to compliance and more about avoiding the rocky outcroppings of hidden risks. For businesses caught in the middle, the only real solution is to focus on the material bottom-line sustainability and resilience risks and opportunities that will affect the business. For example, even though the EU is still in the process of determining the best next steps for the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) and the U.S. looks like it will not be enforcing the proposed climate disclosure rules, those things do not mean climate and sustainability-related risks have gone away for businesses. In fact, it is important to note that in Europe, although the regulatory drivers have been delayed or are being simplified, the laws are still on the books, and in scope companies around the world will no doubt eventually need to comply with whatever the final versions stipulate. The North Star for businesses trying to find their way through this period of uncertainty needs to be concrete data identifying real business risks stemming from climate-related extreme events, carbon emissions, employee safety, human capital and rights and environmental impact. Regardless of the specific details of any piece of legislation, these core fundamentals will affect every business' ability to be viable and profitable for the next ten, twenty or thirty years through countless different economic and political cycles. One good guide for companies looking to keep moving forward with their disclosure reporting is the EFRAG Voluntary Sustainability Reporting Standard for Non-Listed SMEs (VSME). Although this standard was developed initially for small businesses who wanted to voluntarily align their sustainability reporting practices with the CSRD, it is now increasingly being looked upon by considerably larger enterprises as a possible playbook, offering a standardized approach. Now that the reporting threshold for the CSRD has risen to include only companies with 1,000 or more employees, the VSME has become a sort of de facto guide for those businesses that had already started preparing for CSRD before they fell out of scope as a part of the Omnibus negotiations. While a few companies may look at the current delays, policy shifts and general sense of deregulation as an excuse to slowly roll back their sustainability initiatives, the fact is that investors, employees, consumers and other stakeholders are still demanding some level of accountability and transparency. Moreover, they are looking for that information to be reported in a standardized, consistent and most of all, comparable format from one company to the next. Those companies that recognize that need and continue to do the work now to keep their sustainability houses in ship shape order, will still be best positioned to not only anticipate and respond to real business risks but also to be sustainable in the true sense of the word. That means they will be viable, resilient and able to maintain and create value for many years to come.
Forbes
29-04-2025
- Business
- Forbes
EU Financial Regulator Submits Timeline For Reduced Sustainability Reporting Standards
On April 25, the European Financial Reporting Advisory Group submitted a work plan for the rewrite of the European Sustainability Reporting Standards. The request is in response to a letter from Maria Luís Albuquerque, the EU Commissioner for Financial Services and Investments, asking for updated recommendations to comply with the Omnibus Simplification Package's proposed reductions to sustainability reporting requirements. A vote by EFRAG's Sustainability Reporting Board in mid-April failed to garner enough support, giving hope to sustainability advocates. However, the SRB met the Council's requested completion timeline of October 31. As part of the European Green Deal, the EU proposed a series of regulations aimed at controlling businesses' climate related activities. In 2022, the Corporate Sustainability Reporting Directive was adopted to create requirements for businesses to report greenhouse gas emissions and other environmental, social, and governance actions. The CSRD called for the drafting of European Sustainability Reporting Standards to create the regulatory framework for reporting. That responsibility was delegated to EFRAG. EFRAG released the first round of ESRS in late 2022. The European Commission officially adopted them in July 2023 and EFRAG was tasked with drafting sector specific and non-EU company ESRS. However, companies struggled with implementing the first round of ESRS. This forced the Commission to delay further development by EFRAG, shifting focus to drafting additional guidance. By the summer of 2024, the tide had shifted on sustainability and other green initiatives. During the 2024 European Parliament elections, the regulatory burden on businesses became a major theme. During the campaigns, the European Green Deal took the majority of the blame for the EU's faltering economy. The elections resulted in a shift to the right, with environmentally focused parties losing seats. In February, the European Commission adopted a proposal to drastically reduce sustainability reporting requirements in the European Union, including a rewrite of the ESRS. While the proposal has yet to be adopted by the European Parliament, the Commission is moving forward by requesting EFRAG begin the rewrite, in anticipation of the final passage. The instructions indicate that they expect passage of reforms by the end of 2025. In the letter sent on March 25, Albuquerque stated, 'as you will be aware, on 26 February the Commission adopted a first 'omnibus' package of proposals to simplify EU rules, boost competitiveness, and unlock additional investment capacity. You will also have seen that, as part of this initiative, we propose to adopt a delegated act to revise and simplify the existing European Sustainability Reporting Standards (ESRS).' The work plan adopted by EFRAG's SRB states that they will immediately start work to 'establish a vision on actionable levers for substantial simplification.' Initial input is being sought from stakeholders via an online survey open until May 6. Mid-May through July will be focused on 'drafting and approving the Exposure Drafts amending ESRS.' An Exposure Draft, or public draft of the proposal, will be published in August. EFRAG will hold a public consultation in September. The final draft will be submitted to the Commission in October. While the work from ERGAG is being conducted at the direction of the Commission, the final proposal to reduce CSRD requirements is facing a debate in the European Parliament. However, the tight deadlines and clear direction from the Commission indicate confidence that sustainability reporting requirements will be significantly reduced by the end of the year.
Business Times
28-04-2025
- Business
- Business Times
Press on with sustainability for resilience
THE sustainability landscape has seen significant developments in recent months. Following the announcement by the United States on its plans to withdraw from the Paris Agreement, the European Union unveiled the Omnibus Simplification Package on sustainability that includes the delaying of the implementation of the Corporate Sustainability Reporting Directive and the Corporate Due Diligence Directive. For the untrained, these developments can look like governments are taking a step back in their push for sustainability. On closer examination, it is anything but that. In fact, the Omnibus Package highlights the EU's recognition that sustainability goes beyond merely reporting. Instead of overcomplicating sustainability reporting and assurance, it seeks to steer companies to focus on the actual measures that can help to reduce carbon emissions. That said, understandably, these sudden policy shifts and regulatory developments can add to the uncertainty that companies face. Some may be misdirected to pause sustainability initiatives or turn their focus towards short-term performance at the expense of potential longer-term gains from environmental, social and governance investments. Investors continue to pay attention to climate risk management and sustainability. More than half of the investors surveyed in the latest EY Institutional Investor Survey said the impact of climate change will affect their investment strategies. These findings underscore the need for businesses to adopt a strategic and pragmatic approach to sustainability. It is important that companies not lose sight of the real purpose of climate change and sustainability actions – that is to go beyond addressing regulatory requirements. Further, sustainability is not just a compliance obligation but also a driver of efficiency, risk management and profitability. A NEWSLETTER FOR YOU Friday, 12.30 pm ESG Insights An exclusive weekly report on the latest environmental, social and governance issues. Sign Up Sign Up Stepping up on support for sustainability In February 2025, Singapore pledged to further reduce its emissions to between 45 and 50 million tonnes of carbon dioxide equivalent (MtCO2e) by 2035. This builds on the country's earlier announcement to reduce emissions to 60 MtCO2e by 2030. The government has also demonstrated its unrelenting commitment to the fight against climate change through measures such as the S$5 billion top-up to the Future Energy Fund; the increase in Coastal and Flood Protection Fund; as well as disbursement of climate vouchers to Singaporean households. The top-up for the Future Energy Fund supports critical infrastructure for the energy transition – such as undersea cables for low-carbon electricity and hydrogen terminals – and helps foster innovation and technological advancement. Businesses that tap this initiative can potentially enhance resilience and competitiveness. The additional investment into the Coastal and Flood Protection Fund will help to strengthen the country's infrastructure to protect against risks of rising sea levels and storm surges. This is critical for supporting a stable long-term environment and a sustainable future for all. Government interventions aside, achieving national decarbonisation targets will require the collaborative and collective actions of individuals and companies. The journey towards sustainability is not without challenge, even for the most committed organisations. In Singapore, the oft-cited challenges faced are the lack of capital, manpower and knowledge. To this end, Singapore has a robust suite of initiatives to support companies on their sustainability journeys. These include the Enterprise Sustainability Programme (ESP), which is administered by Enterprise Singapore. The programme encompasses a host of initiatives including the Energy Efficiency Grant for the adoption of resource-efficient equipment; the Enterprise Development Grant for Sustainability Projects; the Sustainability Reporting Grant; and the SME Sustainability Reporting Programme (SME SRP). By 2023, more than 4,000 organisations had benefitted from the ESP. These grants from the ESP, together with government-supported green loans, help to alleviate companies' capital burden. For manpower concerns, the Career Conversion Programme for Sustainability supports new hires or transfers from other functions, while the SME SRP and other consultancy support schemes help to provide companies with the necessary knowledge to advance their sustainability initiatives. No room for U-turns As Singapore's ambassador for climate action, Ravi Menon, said: 'We stay the course not because it is easy but because it is necessary for Singapore, so that we can be resilient in a climate-impaired world and competitive in a carbon-constrained world.' Indeed, amid global geopolitical and regulatory shifts, Singapore should and needs to remain steadfast on its position on sustainability. Businesses that proactively adapt to these winds of change while continuing to embed sustainability into their strategies will be better positioned to emerge stronger in the long run. With climate risks continuing, there is no reason for climate action to stop. Praveen Tekchandani and Nhan Quang are the Singapore leader, and partner, for climate change and sustainability services at Ernst & Young LLP, respectively. The views here are the writers' and do not necessarily reflect those of the global EY organisation or its member firms
Forbes
03-04-2025
- Business
- Forbes
EU Parliament Votes To Delay Sustainability Reporting Until 2028
Abstract view of European Union Flag banner getty On April 3, the European Parliament overwhelming approved delaying corporate sustainability reporting requirements until 2028, for fiscal year 2027. The vote comes as part of a push to simplify and reduce sustainability reporting requirements found in the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive. Following the anticipated final approval by the Council, member countries will have until December 31 to adopt the 'stop the clock' directive into national law. In February, the European Commission proposed to drastically reduce sustainability reporting requirements in the European Union. The Omnibus Simplification Package included a delay in reporting requirements until 2028, while overall reductions are debated over the next few months. On April 1, the Parliament approved a 'fast track' option that allowed for an expedited vote. On April 3, the Parliament voted 531 - 69 to approve the delays. The move comes as the EU considers rolling back gains made by climate activists over the past few years. As part of the European Green Deal, a trilogy of directives were adopted to define green actions, establish reporting requirements, and allow for civil penalties. The EU Taxonomy for Sustainable Activities established a baseline for what companies can consider green activities. In 2022, the EU adopted the CSRD requiring reporting by nearly all companies doing business in the EU. In 2024, they adopted the CSDDD, creating additional reporting requirements, as well as legal liability, for companies in relation to their value chain. However, businesses pushed back as the reality of the cost and obligations associated with sustainability reporting requirements became more evident. In December 2024, the President of the European Commission announced that new legislation will be introduced to reduce the requirements of the CSRD and CSDDD. In February 2025, the final proposal was released as the Omnibus Simplification Package. The proposal removes mandatory sustainability reporting requirements for most companies, limiting it to large companies with companies with over 1,000 employees and €450-plus million in annual net turnover. It also limits what large companies can request from small and medium-sized enterprises. That proposal will work through the legislative process over the next few months. To allow time for the debate to unfold, the separate directive was proposed to delay the CSRD by two years and the CSDDD by one year. The 'stop the clock' directive allows businesses to pause the process to start reporting and gives the EU time to debate the broader proposal. The Parliament was the next to the last stop for approval as it is sent back to the Council, that already gave their initial sign off. Despite multiple proposed amendments in Parliament, including one to delay reporting requirements until 2040, no changes were made from the original language, making the approval by the Council a formality. EU members states have until December 31, 2025 to transpose the delays to sustainability reporting into national law. Focus now shifts to the broader proposed reductions of the CSRD and the CSDDD, already being considered in the Council and Parliament.
Forbes
01-04-2025
- Business
- Forbes
EU Parliament Approves ‘Fast Track' Vote On Sustainability Reporting Delays
Abstract view of European Union Flag banner In February, the European Commission adopted a proposal to drastically reduce sustainability reporting requirements in the European Union. The Omnibus Simplification Package included a separate directive to delay reporting requirements until 2028, while overall reductions are debated over the next few months. The so called 'stop the clock' directive was approved by the Council and is now facing a final vote in the Parliament. On April 1, the Parliament approved a 'fast track' option, designating the directive as a priority legislation with an anticipated final vote of approval on April 3. The EU has been the leader in the developing area of sustainability reporting and broader environmental, social, and governance reporting. As part of the European Green Deal, a trilogy of directives were adopted to define green actions, establish reporting requirements, and allow for civil penalties. The first was the EU Taxonomy for Sustainable Activities that established a baseline for what companies can consider green activities. In 2022, the EU adopted the Corporate Sustainability Reporting Directive requiring reporting by nearly all companies doing business in the EU. In 2024, they adopted the Corporate Sustainability Due Diligence Directive, creating additional reporting requirements, as well as legal liability, for companies in relation to their value chain. However, as the reality of the cost and obligations associated with sustainability reporting requirements became more evident, businesses pushed back. In December, the President of the European Commission announced that new legislation will be introduced to reduce the requirements of the CSRD and CSDDD. In February 2025, the final proposal was released in the form of the Omnibus Simplification Package. The proposal removes mandatory sustainability reporting requirements for most companies, limiting it to large companies with companies with over 1,000 employees and €450-plus million in annual net turnover. It also limits what large companies can request from SMEs. That proposal will work through the legislative process over the next few months. In the interim, a separate directive was proposed to delay both the CSRD and the CSDDD until 2028, for fiscal year 2027. The 'stop the clock' directive allows businesses to pause reporting and gives the EU time to debate the broader proposal. The directive was approved by the Council on March 26, but still requires approval by the Parliament. Due to the more open legislative process of the Parliament, extraordinary measures needed to be taken to allow the directive to be adopted in weeks rather than months. Under Rule 170, the Parliament can approve a "request to decide urgently on a proposal submitted to Parliament pursuant to Rule 48(1) as a result of unforeseen developments may be made to Parliament by the President… Such requests shall be made in writing and supported by reasons…' In an April 1 vote, the Parliament approved the fast track procedure by a vote of 427 - 221. Members of Parliament now have until 1:00 PM CET on April 2 to propose amendments. The final vote is scheduled for noon CET on April 3. Given the overwhelming support of the fast track, the delay is likely to pass with no significant amendments. If approved by the Parliament on April 3, there are some additional procedural steps to be taken with the Council before the 'stop the clock' directive becomes official. Once settled, EU members states will have until December 31, 2025 to transpose the delays to sustainability reporting into national law. Focus will then shift to the broader proposed reductions of the CSRD and the CSDDD, already being considered in the Council and Parliament.
