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Berlin (ots) - The EU Commission wants to simplify the requirements for sustainability reports and due diligence obligations. Instead of a targeted bundling of reporting obligations, the proposal envisages massive deregulation. Sustainability reports should only be mandatory for large companies, and due diligence obligations should only apply to direct suppliers. There is a risk that sustainability goals will be missed as a result. With the first "Omnibus Regulation" presented today, the EU Commission is presenting a far-reaching proposal to simplify and weaken existing corporate reporting obligations in Europe. The stated aim is to reduce the bureaucratic burden for companies and to improve the coherence of the requirements of the Sustainability Reporting Directive (CSRD), the Due Diligence Directive (CSDDD) and the Taxonomy Regulation. "The changes proposed in the Omnibus Regulation published today go far beyond the target. Instead of a targeted bundling and simplification of the reporting obligations from the three existing legal acts, the EU Commission is lowering the requirements on a large scale," says Johannes Kröhnert, head of the Brussels office of the TÜV Association. "The goals originally set with the sustainability regulations - more climate protection and fewer human rights violations - are thus watered down." The proposed adjustments to the CSRD would drastically limit the scope of the directive. Instead of applying to companies with more than 250 employees, the CSRD would now only apply to companies with 1,000 or more employees. This would reduce the number of companies covered by up to 85 percent. "If the proposed amendment is implemented, the CSRD would not only apply to significantly fewer companies than originally planned. It would even be a clear regulatory step backwards from the previous regulation, the directive on non-financial reporting, which at least applied to companies with more than 500 employees." In the CSDDD, the future review of due diligence obligations in the value chain is to be limited to direct suppliers only. "An effective supply chain due diligence law should address risks along the entire value chain. The areas in which human rights and environmental violations typically occur are the lower levels of the supply chain. With this limitation, they will no longer be addressed systematically," says Kröhnert. In practice, there is a risk that companies will outsource risks to upstream stages of the supply chain and thus undermine the actual objective of the directive. This could lead to a competitive disadvantage for companies that have already established more comprehensive due diligence obligations. With the first Omnibus package, the EU Commission is responding to massive criticism from the business community that the bureaucratic burden on companies is too high. However, the planned changes are also a missed opportunity for companies. Kröhnert: "Reporting obligations are not only a burden, but also help to identify the opportunities and risks associated with climate protection and sustainability in corporate activities. Ultimately, this enables more resilient, innovative and competitive business." In addition, such fundamental regulatory changes also lead to planning uncertainty and reluctance on the part of companies to make necessary investments. The planned postponement of the mandatory application of the CSRD and the CSDDD now gives member states more time to implement them in national law. In Germany, the last federal government presented a draft for a CSRD implementation law in the summer of 2024, but this was not passed after the coalition broke up. Until a new federal government is in place and political operations start up again, the CSRD implementation is also on hold. The Omnibus Regulation proposal published today will now be examined by the EU member states and the EU Parliament, adapted if necessary and then adopted. Omnibus regulations are legislative proposals that amend various EU legal acts in a bundled manner and thus enable several regulations to be adapted at the same time. About the TÜV Association: As TÜV Association eV, we represent the political interests of the TÜV testing organizations and promote the professional exchange of our members. We are committed to the technical and digital safety as well as the sustainability of vehicles, products, systems and services. The basis for this are generally applicable standards, independent testing and qualified further training. Our goal is to maintain the high level of technical safety, create trust in the digital world and preserve our livelihoods. To this end, we are in regular contact with politicians, authorities, the media, companies and consumers. Press contact:Maurice ShahdPress officerTÜV Association e. V.Friedrichstrasse 136 | 10117 Berlin030 760095-320,
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Original report: https://www.presseportal.de/pm/65031/5979832