The next European Commission will urgently seek to streamline the bloc’s many environmental, social and governance rules, as it responds to complaints that excessive regulations are gutting industry competitiveness.
Simplification will be at the center of the incoming commission’s work, a spokesperson for the European Union’s executive arm told Bloomberg. The plan is to deliver significant measures to reduce burdens, the person said.
The shift follows a stark warning by former European Central Bank President Mario Draghi, who said in September that the EU faces an “existential challenge” unless it takes steps to boost competitiveness with the US and China. Commission President Ursula von der Leyen is now adopting some recommendations from the so-called Draghi report.
The work may result in what are known as omnibus amendments, the commission spokesperson said, referring to proposals that would seek to amend several acts simultaneously.
Companies and industry groups have accused the EU of adding unreasonable layers of regulations in its pursuit of environmentally and socially sustainable economic growth. In an effort to level the playing field, a number of companies have started moving some production to the US from Europe.
Regulations in the cross hairs include Europe’s Corporate Sustainability Reporting Directive, the Corporate Sustainability Due Diligence Directive, and the Taxonomy Regulation, which is a list-in-progress of sustainable business activities. The next commission is due to take office on Dec. 1.
Asset managers, meanwhile, have cautioned against letting streamlining morph into outright deregulation, which they worry would reduce the corporate transparency on which they rely to make ESG allocations. The European Fund and Asset Managers Association, whose members manage about $30 trillion in assets, and the European Sustainable Investment Forum, whose network includes Amundi SA and Allianz SE, have urged the commission to give existing rules time to work.
The commission spokesperson said one of the most pressing goals now is to ensure no new requirements are added to the existing framework.
EU member states have been slow to implement CSRD, which went into force almost two years ago. The commission in September filed a formal notice for failure to transpose with 19 countries, and gave them two months to respond. The deadline for transposing the due diligence directive is July 2026.
Photograph: Former European Central Bank President Mario Draghi; Photo credit: Simon Wohlfahrt/Bloomberg
Topics Legislation Europe
Was this article valuable?
Here are more articles you may enjoy.
Hanover Must Pay Rock Singer $2M in Case of Studio Arson, Court Says 
IBHS Study Shows Smaller Hail May Be More Damaging to Roofs Than Once Believed 
Former Adjuster Charged With Creating Then Approving $190K in Fraudulent Claims 
Florida’s Citizens Is Deferring Flood Coverage Proof While NFIP Is Shut Down 
