Shorouk Express
In February this year, the European Commission proposed delaying recently adopted corporate reporting directives by two years, as part of a so-called “Omnibus” proposal. A package of amendments aimed at reducing regulatory burdens on companies, the Omnibus text suggests to simplify and scale back the scope of the Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy, the Corporate Sustainability Due Diligence Directive (CSDDD), and the Carbon Border Adjustment Mechanism (CBAM).
But it’s more than this. As NGOs and green campaign groups pointed out, the Omnibus is a step back and a signal that European right-wing-dominated politics is already making a U-turn when it comes to the environment.
First things first: you should read Kate Abnett what’s inside the EU’s ‘simplification Omnibus’ on sustainability rules, for Reuters.
Laurence Scialom analysed the meaning of this move in Alternatives Economiques.
“The responsibility of companies and financial institutions, particularly listed ones, no longer stops at their financial performance and the creation of value for shareholders. They must also manage and assume responsibility for the real and potential negative impacts of their strategies and decisions on people, society and the environment.
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This bouquet of European regulations therefore constitutes a real paradigm shift and proceeds to a sort of re-embedding of the company in society, and more generally in ecosystems. However, the risk of unravelling these achievements is now major.
By unravelling the Green Deal, we are losing our lead, we are acknowledging that Europe will now focus on adapting to climate change rather than fighting it. We are sacrificing ourselves to a short-term logic of competition between states, we are creating uncertainty for all the actors who have already committed to an ambitious approach in terms of sustainability. We are therefore penalizing the most virtuous. The cherry on the cake is that we are offering China the role of leader in the field of sustainability and thus strengthening its attractiveness in the global South.”
EUobserver’s journalist Wester van Gaal unveiled what’s behind the EU new legislations: a blatant distortion of data. “The Commission, in various documents and statements, has defended its plans on the basis of cost,” van Gaal wrote, citing EU forecasts that the new ‘rationalisation measures’ will cut costs by about €5 billion a year. However, he noted, “these figures are rough estimates”. “Even if they materialise, these savings are likely too small to meaningfully impact corporate balance sheets. According to the commission’s own estimates, due diligence reporting costs (CSDDD) range from €52,200 for large companies to €643,000 for very large companies with a turnover higher than €5 billion”.
As the Dutch NGO SOMO calculated, “even at the highest estimate (€643,000), annual compliance costs would represent just 0.01 percent of the average CSDDD company’s annual turnover and 0.09% of its net profit in 2023 (and 0.13% of shareholder payouts).”
Eric Bonse in Taz cited the right-wing: “No more climate nonsense” and yet: “it is questionable, though, whether this will be enough to catch up with the USA and China”.
Adhik Arrilucea mentioned another bit of proposals presented alongside the Omnibus, known as the Affordable Energy Plan, to make energy as cheap as possible. In Público.es, Arrilucea described the plan basically as a pact with the devil: “Brussels turns its back on the Green Deal in its commitment to natural gas: ‘It is extractivist neocolonialism’”.
Yet, amidst these concerns, some partial but notable positive developments came from France and Italy.
In France, a significant legislative step was taken against persistent environmental pollutants (PFAs). Justine Guitton-Boussion in Reporterre tells us about the new law, which represents a victory for environmentalists and responds to studies highlighting the adverse health effects of chemicals.
Meanwhile, in Italy, the extended negotiations of the COP16.2 on biodiversity concluded in Rome with a compromise that aims to operationalise the Kunming-Montreal Global Biodiversity Framework established in 2022. The agreement sets a roadmap to mobilise financial resources, targeting $200 billion annually by 2030 for biodiversity conservation. Fabrizio Fasanella highlights the complex interplay between environmental goals and geopolitical considerations for Linkiesta.
As said by Scialom, “the game may not be over, even if the hope of a surge is slim”.
