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The EU’s plan to ease sustainability rules sparks debate over protecting corporate green competitiveness. (Photo: iStock)
On June 30, more than 100 companies and investors issued a joint statement urging the European Union to maintain its strong sustainability regulations. While they acknowledged that regulatory frameworks can be simplified, they emphasized that such changes must not compromise the long-term economic value of sustainable practices.
In response to reports that the EU might withdraw its proposed anti-greenwashing rules, a spokesperson for the European Commission clarified that no internal consensus had been reached, but did not rule out the possibility.
IKEA's parent company, Nokia back call to keep EU green rules
In March, the European Commission proposed the “EU Omnibus Simplification Package,” a set of measures aimed at reducing administrative burdens and easing the pressure on businesses to decarbonize. The package is still under negotiation, sparking debates among stakeholders.
Led by organizations such as the European Sustainable Investment Forum (Eurosif), more than 100 businesses and investors, including Ingka Holding (IKEA’s parent company), Finnish telecom giant Nokia, and French utility EDF, signed the joint statement. They called on the EU to preserve the core of its sustainability rules, particularly those related to corporate carbon disclosures.
The statement emphasized that the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) are crucial for advancing sustainability, growth, and competitiveness in the EU. These directives help direct capital toward technologies and sectors aligned with the “Clean Industrial Deal” while also generating long-term value for investors.
Signatories argued that simplifying regulations does not have to conflict with maintaining their substantive benefits. Among their proposals: adjust the scope of the CSRD to cover companies with more than 500 employees, with a phased implementation starting with firms over 1,000 employees, who would be given 2–4 years to present transition plans for meeting climate targets.
Currently, the CSRD applies to companies with over 250 employees. However, the European Commission’s proposed package seeks to exempt companies with fewer than 1,000 employees. If passed, the new rules could remove the sustainability reporting requirement for up to 80% of firms or around 40,000 companies.
European Commission President Ursula von der Leyen unveiled “EU Omnibus Simplification Package” in February, triggering debates among stakeholders. (Photo: Ursula von der Leyen/X)
Anti-greenwashing bill in limbo amid microenterprises exemption debate
The proposed “Green Claims Directive,” which aims to prevent greenwashing, may be at risk of withdrawal. A European Commission spokesperson confirmed that the directive is still under discussion, but acknowledged that insisting on applying the rules to micro-enterprises could jeopardize the proposal’s future.
Introduced in March 2023, the directive would require companies to obtain third-party verification before making environmental claims, such as labeling products as “green” or “sustainable.” However, the proposal remains under negotiation, with key details yet to be finalized.
The legislative process took a sharp turn after the European People's Party (EPP), the largest party in the European Parliament, publicly opposed the directive. The EPP argued that the rules were too complex and inconsistent with the current direction of simplifying sustainability regulations, particularly for micro-enterprises with fewer than 10 employees and annual revenue below €2 million (approx. USD 2.3 million).
According to the European Commission, there are around 30 million micro-enterprises in the EU, representing 96% of all businesses. The issue poses an early challenge for Denmark as it takes over the EU’s rotating presidency in July, with hopes it can help balance deregulation and sustainability goals.
Source: Eurosif, Reuters, ESG Today, Politico, Euractiv
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