The EU aims to eliminate reporting requirements for companies regarding their environmental impact.

In the European Union, a rule requiring companies to report on the environmental harm they cause is now at risk. As reported by Politico, citing sources familiar with the discussions, the draft of new legislation being prepared by the team of Commission President Ursula von der Leyen proposes the elimination of the "double materiality" principle in the EU’s Corporate Sustainability Reporting Directive (CSRD).

This concerns the so-called "double materiality" concept, which mandates that companies consider not only the impact of climate change on their operations but also their own contribution to environmental degradation. This principle is embedded in the EU Corporate Sustainability Reporting Directive (CSRD) and is a crucial element of the European Green Deal.

However, the draft of the new "omnibus" law aimed at simplifying regulations, which has been circulated among the commissioners, does not include the "double materiality" principle. According to sources, the preparation of the initiative continues under the leadership of Commission President Ursula von der Leyen.

Including the CSRD in the list of regulations to be simplified is part of von der Leyen's promise to reduce the administrative burden on businesses. However, there are growing disputes within the Commission about whether this process is going too far. One source reported "strong opposition," which has delayed the proposal from being sent to the relevant departments for review, although it was originally planned to be presented next week.

"It will be an ugly text, but we are doing everything we can to preserve the essentials," said one official, noting that the draft excluding the double materiality principle was circulated on Thursday.

The Executive Vice-President of the Commission for Climate and Competition, Teresa Ribera, opposes the weakening of reporting requirements. According to sources, she has requested a pause in sending the draft to the relevant services until contentious issues are resolved. This week, the Spanish government and Socialists in the European Parliament sent a letter to the Commission warning against any weakening of regulations.

Member of the European Parliament Peter Liese, representing the European People's Party (EPP), confirmed that negotiations are challenging. He stated that a possible compromise could be a temporary moratorium on introducing new requirements for businesses until the regulatory simplification law is finalized. He emphasized the need to act quickly to "send the right signal to companies".