Following the release of the Omnibus simplification package, questions arise as to the EU’s dedication to sustainability reporting – a new fight on the Taxonomy is once again brewing. Unfortunately, the proposal presented today is a clear example of simplification at the expense of the climate. The market itself has been requesting transparent information on the sustainability of economic activities; if unchanged, the proposal presented today would mark a step in the wrong direction, with less transparency and clarity for investors and the market in general on the sustainability of economic activities. This is to the detriment of the market, and most of all the climate.  

Key Messages: 

• Leaving only the largest companies to report under the CSRD, exempting 80% of companies from the scope, is an immense setback to the efforts of investors, emitters and other stakeholders, including the European Commission itself, and the years it has taken to get this crucial reporting into law. 

• The European Commission’s proposal today, if entered into law, would divert from the Green Deal objectives when it comes to shifting capital to crucial climate mitigation activity, sending a damaging market signal of the EU’s dedication to ensuring transparent available information and preventing greenwashing.  

• The process surrounding the Taxonomy and sustainability reporting has already gone through several iterations, resulting in low trust levels towards the establishment in charge due to claims of a less than transparent and predictable process. Now, to safeguard the positive contribution of the EU sustainability reporting rules on climate change mitigation, a new mobilisation needs to happen across sectors and stakeholders.  

Context: As outlined by Bellona since the start of the work on the EU Sustainable Finance Taxonomy and CSRD, it is crucial to provide the market, as they have themselves requested, information on sustainability of economic activities, to enable them to contribute monetarily to the fight against climate change. Through a rocky process, including attempts of making the Taxonomy itself a tool for greenwashing, Bellona has together with a joint civil society coalition fought for the climate credibility of the Taxonomy. More information here.