New EU proposal: 'Don't ease off on your sustainability efforts'

That is according to our Head of Sustainability Reporting, Eli Bleie Munkelien. She points out that the EU's Green Deal remains firmly in place, as does the need for businesses and the world to transform, reduce risk and innovate.

'Even if the EU were to ease its sustainability reporting regulations, this would not affect the environmental and climate targets that the EU and the rest of the world have committed to. Sustainability will remain a source of competitiveness in the future. However, it is important to keep track of the proposed changes and how they will affect each individual company,' says Munkelien.

The widely discussed Draghi report highlighted the need for the EU to strengthen the region's competitiveness, particularly in relation to the US and China. Key measures include lowering energy prices, mobilising public and private investment, and reducing unnecessary bureaucracy.

The European Commission therefore recently proposed reducing the number of companies subject to the CSRD rules, which require large companies in the EU and EEA to report in greater detail on sustainability, environmental impact, social issues and governance (ESG). Under the proposal, only companies with more than 1,000 employees and either turnover exceeding €50 million or a balance sheet total exceeding €25 million would have to report under the CSRD. It is estimated that this would reduce the number of companies required to report in the EU and EEA by 80%.

The Commission is also proposing regulatory changes related to the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Taxonomy Regulation, all with the aim of simplifying reporting requirements and regulations. 

Critics are concerned that this could undermine environmental and climate action and make European businesses less transparent.

‘Businesses generally welcome the simplification and consolidation of the EU’s sustainability regulations, but many see their competitiveness as closely linked to their sustainability efforts. We recommend using this time wisely to ensure that reporting serves as a management tool that helps you manage risk, implement strategy and drive innovation in business models and solutions,’ says Munkelien.

She also emphasises that nothing has yet been decided, and that conclusions are not expected until towards the end of the year.

– It is therefore important that those currently subject to the reporting requirements continue their work, preferably by using the voluntary sustainability reporting standard for small and medium-sized enterprises, which is emerging as the new common reporting standard. Those who are not subject to the regulations until the 2025 financial year can expect to have revised regulations to follow, says Munkelien.

Norwegian companies should also remember that the sustainability reporting requirements under the Accounting Act and the Transparency Act remain in force.

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