Brussels (Brussels Morning Newspaper) – The European Commission adopted a set of proposals seeking to simplify EU rules, reduce administrative burden and boost competitiveness.
The European Commission proposed comprehensive modifications to EU green rules, eliminating sustainability reporting requirements for thousands of businesses and delaying its due diligence policy by a year. Under the proposals, only firms with over 1,000 employees would be required to report on their environmental and human rights effects.
The Commission claims it will deliver €6.3 billion in annual savings on administrative expenses, as well as mobilise public and private investment capability of €50 billion by streamlining and optimising several investment programs.
How will the EU’s green rule change impact firms?
The regulations currently target firms with over 250 employees, and the commission stated the change would exempt 40,000 companies – or 80% of all firms the policy was originally created to cover.
The Commission stated it is exempting 182,000 importers, approximately 90%, from the carbon border adjustment mechanism (CBAM), a tax designed to reduce production emissions. The Commission expressed they are mostly small and medium enterprises, and the carbon border tax will still cover more than 99% of emissions.
Furthermore, 80% of firms will be exempt from the scope of corporate sustainability reporting, letting the European Union concentrate on firms likely to have the most significant environmental impact. The largest firms will also be given more time to be ready to concede with the new sustainability due diligence requirements.
In her remarks, Ursula von der Leyen, President of the European Commission, said,
Simplification promised, simplification delivered! We are presenting our first proposal for far-reaching simplification.
EU companies will benefit from streamlined rules on sustainable finance reporting, sustainability due diligence and taxonomy. This will make life easier for our businesses while ensuring we stay firmly on course toward our decarbonisation goals. And more simplification is on the way.
