Tuesday 1 April marked the European Parliament’s first vote on the omnibus, a legislative project aimed at simplifying several key regulations in the field of sustainable finance. MEPs adopted the “urgent procedure” by 427 votes to 221, with 14 abstentions. This paves the way for a vote that is eagerly awaited by businesses. They should benefit from a postponement of certain obligations, whilst the European Union reworks the substance of the texts.
“We have voted today on the principle of a ‘stop-the-clock’ procedure and we will vote on it on Thursday. Renew Europe has voted in favour of this measure in order to provide predictability for businesses,” says MEP Pascal Canfin (Renew/Renaissance), the centrist group’s negotiator for the omnibus directive.
The French MEP was calling for a political agreement, ahead of the vote, between the supporters of European Commission president Ursula von der Leyen: the pro-European right, the Social Democrats, the centrists and the ecologists. But negotiations to this end have failed. “We deeply regret that it was not possible to obtain a von der Leyen majority in this vote. We still hope that such an agreement can be reached by Thursday,” says Canfin.
Different deadlines
The member states at the end of March already approved a commission proposal to postpone:
- by two years the entry into force of the obligations of the Corporate Sustainability Reporting Directive (CSRD) for large companies that have not yet started implementing them, as well as for listed SMEs;
- by one year the transposition deadline and the first application phase (covering the largest companies) of the Corporate Sustainability Due Diligence Directive (CSDDD).
Why do the deadlines differ between CSRD and CSDDD? “Postponing the CSRD by just one year is not enough,” says Canfin. “As we have to amend level 1, i.e., the legal text, and the commission has important delegated acts to draft, this will take more than 12 months--more like 15 to 18 months, in my opinion. By voting for two years, we are providing clarity and enough time, but not too much either.”
And he insists: “As long as the rules are not amended, this means that companies will have to legally, and with their auditors behind them, start drawing up their CSR report while we are negotiating something else. This is why, from our point of view, it simply makes sense to give them a ‘stop-the-clock.’”
For the French MEP, the European Commission’s proposal is “the only one we can accept quickly. If we open the debate on deadlines, different opinions will be expressed, there will be differences of opinion and it will take longer. We should therefore apply the same reasoning that prevailed in the council. Even if, here and there, some countries had the will to amend, in the end, they did not amend anything and simply approved the stopping of the clock as proposed by the commission.”
No to a reform that would gut the directives.
The vote on the “stop-the-clock” proposal will therefore take place on Thursday 3 April. It should be noted, however, that this is not the final adoption of the proposal. After the vote in the European Parliament, the co-legislators will still have to agree on a final version of the text. At this stage, it is reasonable to assume that a compromise can be reached quickly, enabling final adoption before the summer. EU member states will then have until 31 December 2025 to transpose the directive into their national law.
The only thing left to agree is the substance, namely the revision of the CSRD and CSDDD texts as part of the omnibus. “Yes to simplification, if it makes it easier and more effective to implement our ambitions,” says Canfin. “No to a reform that would gut the directives and prevent us from achieving the goals we have set for the European Union.”
On CSRD, the Renew negotiator believes that “its red lines have been maintained for the time being,” starting with double materiality (the fact of considering both the impact of the company on the environment and society, and the impact of environmental and social issues on the company). On the subject of due diligence, Canfin is nonetheless critical of the commission’s new proposal, which reverses the European harmonisation of civil liability regimes. “This will reintroduce competition between member states,” he fears.
It is a profound dilution of due diligence and reporting.
MEP (ECR/ADR) will vote for the postponement. “A large majority on the right supports this postponement as it is a step in the right direction,” says the MEP. “As far as the CSRD is concerned, I am in favour of abolishing as much bureaucracy as possible. As for the CSDDD, I’m in favour of abolishing it altogether. Its approach is ideological and unrealistic: companies cannot be held responsible for what is the responsibility of states, such as respect for human rights in third countries. By imposing unilateral requirements, we are damaging European supply.”
On the left, MEP (déi Greng/Greens/EFA) plans to oppose this postponement, interpreted as the first act of a vast deregulation undertaking. “Now we’re concentrating on ‘stop-the-clock,’ but the real problem is the deregulation to come: it is a profound dilution of due diligence and reporting. This creates confusion, penalises companies already committed to compliance and deprives banks of essential data. These directives are a major step forward for human rights and the environment. To call them into question now, without evaluation or consultation, undermines the credibility of the European institutions.”
This article was originally published in .