EU Faces Pressure to Scale Back ESG Reporting Requirements
The European Union (EU) is facing mounting criticism over its proposed ESG (environmental, social, and governance) reporting requirements. France, one of the bloc's largest economies, is preparing to unveil a formal proposal that seeks to limit the scope of the regulations.
France Proposes Scaling Back CSRD
The French government is working on a set of recommendations aimed at reigning in the Corporate Sustainability Reporting Directive (CSRD). The proposal is expected to include limiting the number of companies subject to the full reporting requirements.
"The goal should be rules that are manageable, but 'not costly for companies,'" said Sophie Primas, a spokesperson for the French government.
Germany and Poland Echo Concerns
France's move follows similar concerns raised by Germany, which urged the European Commission to scale back the CSRD. Poland, currently holding the rotating EU presidency, has also called for a review of the bloc's green regulations.
Impact on EU Competitiveness
Critics argue that the extensive ESG reporting requirements are burdensome on businesses, especially for smaller companies. They contend that the regulations contribute to a loss of competitiveness for European firms.
EU Weighs Scaling Back
The European Commission is reportedly considering backing significant reductions in the scope of the CSRD. The commission is assessing various options and continuing to gather input.
Support for Sustainability Agenda
Despite the criticism, there remains support within the EU for the bloc's broader sustainability agenda. Some of France's largest companies have noted that the ESG reporting requirements are essential for ensuring European companies' readiness for ESG risks and global competitiveness.
Opposition from Outside EU
The ESG reporting requirements have also drawn criticism from outside the EU. Lawmakers in the US have argued that they represent regulatory overreach. Former European Central Bank President Mario Draghi has also singled out regulations as a factor contributing to Europe's lagging competitiveness compared to the US.
Outlook
The ongoing discussions are likely to impact the development of ESG reporting requirements for non-EU companies without listings in the bloc. The debate centers on determining whether such requirements should apply globally.