The EU Sustainability Omnibus initiative, aimed at simplifying and reducing the regulatory burden of the EU’s corporate sustainability regulatory framework, is nearing completion. Following the European Parliament and Council of the EU’s provisional agreement on the 9 December 2025, the proposal to amend the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) is awaiting final approval and publication. The European Commission is also preparing a proposal to streamline the European Sustainability Reporting Standards (ESRS), based on EFRAG’s technical advice submitted on 3 November 2025. Other elements, including the simplifications to Taxonomy reporting, have now been published.
AFME’s Work
AFME continues to engage with relevant stakeholders on the simplification of EU sustainable finance regulation including the ESRS, Sustainable Finance Disclosure Regulation, further simplification of EU Taxonomy reporting and ESG risk management regulation.. AFME previously engaged on the proposals to amend the Corporate Sustainability Reporting Directive, the Corporate Sustainability Due Diligence Directive, and Taxonomy reporting requirements, which have now progressed. A proportionate and coherent sustainable finance framework remains essential to support banks’ role in financing the transition and strengthening the EU’s economic competitiveness.
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 together 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 agreement on the amendments to the CSRD and CSDD and publication of the amendments to Taxonomy reporting are welcome steps towards cutting complexity. Clear, workable rules will support the mobilisation of finance for the transition while minimising unnecessary regulatory burdens and supporting competitiveness.
It is now crucial that the political agreement is implemented swiftly so companies gain the clarity they need.
Notwithstanding these important efforts, the EU’s sustainable finance framework is set to remain the most ambitious globally. Policymakers must continue to streamline regulation and support competitiveness – including through the simplification of the ESRS and the full review of Taxonomy reporting, and by reviewing banking legislation and supervisory requirements – to ensure that it remains effective, proportionate, and internationally competitive. For further details, see our press release welcoming the agreement here.
