Proposal to Simplify Sustainable Regulatory Policies
The European Council agrees to simplify sustainable regulatory policies for European companies and enhance the competitiveness of the EU.
The European Commission released a proposal in February this year to postpone the application of sustainable regulatory policies and optimize green investment plans. This proposal will save 6.3 billion euros in costs annually and release 50 billion euros in investment funds.
Related Post: European Commission Released a Proposal to Simplify Multiple Sustainable Regulations
Content of Sustainable Regulatory Policy Proposal
For Corporate Sustainability Reporting Directive, all large enterprises and listed small and medium-sized enterprises that have not yet started disclosing information can postpone disclosure for two years.
For Corporate Sustainability Due Diligence Directive, large companies that meet the first stage disclosure requirements to defer disclosure for one year.
In addition to delaying two regulatory policies, the proposal released by the European Commission also includes the following:
EU Taxonomy
- Narrow down the scope of enterprises involved in the Taxonomy (consistent with the Corporate Sustainability Due Diligence Directive).
- Add activities that are partially consistent with Taxonomy to expand enterprise transition financing.
- Simplify 70% of disclosure data points and add a financial materiality threshold (10%).
- Simplify the Do no significant harm (DNSH) standard.
Carbon Border Adjustment Mechanism
- Exempt small importers from reporting obligations and retain 99% of carbon emissions coverage.
- Simplify the emission calculation, information disclosure, and financial responsibility.
- Strengthen the mechanism rules to ensure long-term effectiveness.
- Release new proposals in 2026 to further simplify the mechanism.
InvestEU
- In addition to simplifying sustainable regulatory policies, the EU will also optimize green investment programs, including InvestEU. These modifications include:
- Use InvestEU investment returns for reinvestment, expected to increase the investment by 50 billion EUR.
- Simplify investment process costs, expected to save 350 million EUR in compliance costs.
- Strengthen cooperation among member countries under investment plans to support their enterprises.
Reference:
Council Agrees Position on the ‘Stop-the-clock’ Mechanism
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