What to expect from the CSRD Omnibus proposal
The CSRD Omnibus proposal is a proposal from the EU to consolidate and streamline sustainability reporting rules. This includes the current EU taxonomy, CSRD and the proposed CSDDD. It responds to concerns that regulation could be harming EU global competitiveness, and that parts of the regulation are redundant or overly complex.
Why are people talking about it this week?
The EU published a “Competitiveness compass” on 29th January with some high level proposals including removing 31,000 SMEs from the scope, reducing reporting burden for large and smaller businesses by 25% and 35% respectively, and creating a new category for “midcap” firms of 250 – 1000 employees. However, statements in support of regulatory clarity and maintaining the ambition of current proposals have been published by large EU firms who have already started reporting, and by a consortium of civil society and human rights organisations.
What is likely to happen and when?
The Omnibus directive is due for publication on February 26th, but it is rumoured that there is still division among EU commissioners on overall direction, and that proposals are not yet well developed. We should expect to see more public interventions seeking to influence the contents and outcomes, even once the proposal is published. The matter is likely to be a source of some debate, especially given recent political shifts in European governments. Clarity on any changed reporting scope and timelines is some way off.
What are the implications for Verco clients?
Companies already preparing to report on CSRD should continue to do so, while monitoring for updates to timelines and entities in scope. There are multiple phase-in provisions which lighten the initial reporting burden for CSRD, and allow a focus on mandatory reporting requirements, and data which best serves the demands of investors. Climate data is likely in this category, and will also allow disclosure in line with IFRS sustainability standards being adopted around the world. A focus on improving data governance and enhancing sustainability risk assessment is fundamental preparation for a range of regulatory regimes. It also provides direct business benefits.
We can help with CSRD
Please get in touch if you'd like to discuss CSRD reporting, the disclosure process or any of the topics in this article.
