PRI responds to final agreement on the EU 'Omnibus' proposal

The key amendments are:  

• CSRD scope set at 1000 employees and EUR 450 million turnover. This will exempt around 90% of companies from the existing scope, limiting reporting requirements to around 5000 companies.  
• Requirement to adopt a climate transition plan has been removed from CSDDD. Companies will now only be required to disclose transition plans, if they have one, under CSRD.  
• Under CSDDD, impacts must be identified throughout the value chain using a risk-based approach –with restrictions on information requests to companies with less than 5000 employees 
• Scope of CSDDD now set at 5000 employees and EUR 1.5. billion turnover and its application is postponed by one year to July 2029.  

The PRI, along with over 475 responsible investors and businesses, has been advocating for targeted regulatory simplification that preserves the key elements of the sustainable finance framework.    

Elise Attal, Head of Europe Policy, comments: 

“The final agreement on the Omnibus proposal significantly changes the operating environment for investors. Reducing the accessibility of comparable data needed to make informed capital allocation decisions will ultimately increase costs for investors, setting back the EU’s economic transition and is a setback for the EU’s economic transition and ffuture competitiveness.  

”Deleting requirements for climate transition plans will further delay implementation of the EU’s new 2040 climate target by weakening its ability to attract credible transition finance – particularly as other markets like the UK move ahead with their own requirements.   

”Exempting over 90% of companies from CSRD and CSDDD also risks making the EU a higher-cost place to invest increasing transaction costs as investors resort to ad hoc requests and third-party providers to manage sustainability risks.  

”Despite these setbacks, important elements of the framework remain. The CSRD will still provide transparency on the sustainability risks, opportunities and impacts of the EU’s largest companies – in line with international standards. The Commission must now ensure this is preserved in the revised ESRS and develop a fit-for-purpose voluntary standard for companies falling out of scope.  

”Europe will need financial institutions and corporates to work together to meet its legally binding climate, social and nature goals. Now is the time to implement – without further delay”.