On 26 February 2025, the European Commission adopted an “Omnibus” package aimed at simplifying and reducing the regulatory burden of the EU’s corporate sustainability regulatory framework. As a key pillar of the EU’s competitiveness agenda, the package aims to streamline reporting and due diligence requirements, with a particular focus on SMEs. The package amends the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), EU Taxonomy and Carbon Border Adjustment Mechanism (CBAM). Legislative negotiations on the proposal are ongoing in 2025.
AFME’s Work
AFME is engaging with relevant stakeholders on the different elements of the package, to ensure that the omnibus initiative meaningfully addresses challenges identified by our members including burdensome, duplicative or ineffective requirements. It is essential that the EU sustainable finance framework enables banks’ role in helping finance the transition and supports the growth and competitiveness of the EU economy.
AFME strongly supports the initiative to streamline the EU sustainable finance regulatory framework, ensuring it focuses on mobilising capital and financing for the transition while minimising regulatory burdens. This should go hand in hand with measures to create the economic conditions to support investment in companies as they transition, as set out by the European Commission in the Clean Industrial Deal. For more details, see our press release welcoming the package here.
The European Commission’s proposals to amend CSRD, CSDDD and the EU Taxonomy are an important step, but do not currently address key challenges faced by banks under CSRD and Taxonomy reporting.
Further work is required to provide certainty to companies, address challenges for the first wave of companies reporting under CSRD, and to review the impact of the reduced CSRD scope on regulation of the financial sector. The latter is needed to avoid mandatory reporting for smaller companies being replaced by bilateral requests that banks would need to make in order to meet regulatory and supervisory requirements. In addition, the simplification efforts on the EU Taxonomy need to be scaled up. Our detailed positions on the omnibus package can be found here.
