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The lead negotiator for the EU\u2019s sustainability Omnibus<\/a>, Swedish MEP J\u00f6rgen Warborn, has set out his initial proposed changes, including a climate transition plan \u201creality check\u201d and higher thresholds for the scope of application.<\/p>\n The political groups in the European Parliament continued to be heavily divided in an exchange of views<\/a> on the Corporate Sustainability Reporting Directive (CSRD)<\/a> and Corporate Sustainability Due Diligence Directive (CSDDD)<\/a>\u00a0this week.<\/p>\n Omnibus rapporteur Warborn, who is leading the negotiations on behalf of the centre-right European People\u2019s Party (EPP), was keen to highlight the need to move \u201cswiftly and smoothly\u201d, and to cut costs \u201ceven more\u201d than what the European Commission has proposed.<\/p>\n Warborn outlined his initial \u201cheadline\u201d proposals, which included a \u201creality check\u201d on climate transition plans and ensuring the proposed \u201cshield\u201d for smaller companies \u201cwill actually work\u201d.<\/p>\n The MEP also said he would like alignment on scope for all regulations in the sustainability Omnibus, and that this should be set using a higher threshold than the currently proposed 1,000 employees.<\/p>\n Responding to this point, Ralf Sauer \u2013 co-lead for legislative negotiations on CSDDD at DG JUST \u2013 stressed that the Commission made a \u201cconscious choice\u201d not to touch the scope of application for the CSDDD, given that this was already a difficult compromise reached during the negotiations on the directive.<\/p>\n The rules phase in the application of the directive, but it will eventually apply to companies with more than 1,000 employees and a turnover of more than \u20ac450 million.<\/p>\n On CSDDD specifically, Warborn said he would like to use the term \u201cchain of activities\u201d instead of \u201cvalue chain\u201d to give more clarity to businesses, and for there to be clearer language in an article dealing with identifying and assessing actual and potential adverse impacts.<\/p>\n Finally, the rapporteur backed the Commission\u2019s proposals on limiting due diligence to direct business partners, as well as plans to remove civil liability.<\/p>\n Shadow rapporteur views<\/strong><\/p>\n Right-wing MEPs from the Patriots for Europe and European Conservatives and Reformists Group (ECR) continue to advocate for deleting all reporting and due diligence requirements.<\/p>\n The shadow rapporteur for the Patriots, French MEP Pascale Piera, called the Commission\u2019s proposal \u201cunsatisfactory\u201d because it \u201cdoes not counter the negative impacts of the standards\u201d.<\/p>\n She added that the group plans to table amendments to \u201csave what remains of our economies\u201d and put companies first.<\/p>\n Turning to the ECR, Polish MEP Tobiasz Boche\u0144ski agreed that both directives should be \u201cthrown out entirely\u201d, especially since they have barely come into force and not yet had the chance to \u201ctruly impact\u201d the European economy.<\/p>\n He said the party would support all proposals to remove unnecessary regulations, and called for postponing the directives by \u201cat least 10 years\u201d and making all reporting obligations voluntary.<\/p>\n Meanwhile, the S&D, Renew, Greens and the Left are all pushing to ensure the core objectives of the regulations remain.<\/p>\n Renew shadow rapporteur Pascal Canfin has said the group is trying to keep the centre-majority to \u201cpreserve the rationale\u201d behind the two regulations, adding that he hoped to \u201cconvert\u201d some of the right-wing MEPs.<\/p>\n \u201cThe alternative majority is to kill the whole text, which of course is a possible alternative for the EPP, but not one Renew will support.\u201d<\/p>\n He added that Renew would support more simplification of audit requirements under CSRD due to the many complaints from companies regarding this, and also disagreed with the Commission\u2019s proposal on civil liability for CSDDD.<\/p>\n \u201cThere will now be 27 regimes [for civil liability] which is the exact opposite of simplification and a single market approach,\u201d Canfin said, adding that Renew would \u201cpush for harmonisation\u201d.<\/p>\n Speaking on behalf of Dutch MEP and former CSDDD rapporteur Lara Wolters, Ren\u00e9 Repasi said S&D has been \u201cconsistent\u201d in its messaging, and that \u201cslashing\u201d enforcement mechanisms, requirements and scope \u201ccan hardly be described as simplification\u201d.<\/p>\n The Greens also backed reviewing audit requirements and stressed their focus on maintaining the initial scope of the CSRD, while staying open to \u201ctargeted administrative provisions\u201d related to the largest SMEs.<\/p>\n On the CSDDD, they argued that the changes to the civil liability clause goes against access for justice and \u201cguarantees impunity\u201d for companies. They also said that the decision to limit due diligence to direct business partners goes against the principle of due diligence as established by OECD guidelines and would render the provision \u201ccompletely useless\u201d.<\/p>\n Following the shadow rapporteurs\u2019 comments, Warborn said it will be an \u201cinteresting report and negotiations, trying to find good compromises for European businesses and citizens\u201d.<\/p>\n He acknowledged the core objectives of the regulations and said these must be taken into consideration, but stressed the need for a reality check to support companies.<\/p>\n The deadline to submit the report is June, with a vote on amendments to CSRD and CSDDD tentatively scheduled<\/a> for October.<\/p>\n Separately, the Council of the European Union\u2019s working group overseeing simplification will meet today to examine a draft document seen by Responsible Investor<\/a> which outlines member state initial asks on CSRD and CSDDD.<\/p>\n ESRS update<\/strong><\/p>\n Meanwhile, the sustainability reporting board (SRB) of EU standards body today voted to approve<\/a> the European Sustainability Reporting Standards (ESRS) simplification work plan with 21 votes in favour and one abstention.<\/p>\n