- Sustainability
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- 05.02.2025
Possible EU omnibus procedure: A classification from an investor’s perspective
Sustainable investing requires clear rules and transparency. This is important in order to curb greenwashing and to offer investors reporting in accordance with generally applicable standards. As EB-SIM, we have therefore always been in favor of clear regulation.
A commentary by Dr. André Höck, CESGA Head of Sustainability and Strategy
The EU Taxonomy Regulation, the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) are fundamental cornerstones of the EU’s sustainability policy architecture. Together, these frameworks increase transparency in the market and help investors to manage risks, identify opportunities and ultimately realign capital towards a net zero economy that is more competitive, fairer and more prosperous.
Sounds time-consuming and complicated? It is.
As a result, there is a growing desire to consolidate and simplify these directives. At the moment, there are efforts at EU level to bundle these areas of regulation via an omnibus legislative procedure. What initially sounds sensible has a crucial catch: in this case, individual directives that are only just beginning to take effect could be re-discussed and amended. For example, there is a risk that individual regulations could be scaled back again and sustainability reporting weakened. Major adjustments would not only cause new confusion among investors, they would also undermine consistency and predictability for companies subject to reporting requirements.
This is why EB-SIM, together with other investors, has issued a joint declaration by the Institutional Investors Group on Climate Change (IIGCC), the European Sustainable Investment Forum (Eurosif) and the Principles for Responsible Investment (PRI) calling for the omnibus procedure to be abandoned.
In our opinion, it makes sense not to change the core of the existing laws. Rather, adjustments should specifically address inconsistencies between the individual ordinances. We advocate focusing on implementation. The reporting obligations for companies should be made more efficient and accessible through technical standards and clear guidelines on their application. This would maintain continuity in the legislation and contribute to a clear regulatory framework for financial market participants.