EFAMA has welcomed the European Commission's first 'Regulatory Simplification Omnibus' which would "reduces regulatory burden while maintaining important sustainability ambitions like double materiality".
The EC published the report on 26 February, which aims to reduce the sustainability reporting burden on EU companies through amendments to the Corporate Sustainability Due Diligence Directive (CSDDD), Corporate Sustainability Reporting Directive (CSRD) and EU Taxonomy Regulation.
EFAMA said in a reaction statement: "We support this initiative as a positive and necessary step to increase the competitiveness of European companies and reduce regulatory burden, while still maintaining the ambitions of the EU Green Deal."
The watchdog highlighted a number of positive developments, including maintaining double materiality assessments, as this was essential for asset managers to identify material sustainability risks and comply with their own sustainability reporting obligations under SFDR.
It also liked the avoidance of sector-specific ESRS reporting, which would have increased the reporting burden significantly, and welcomed deleting the review clause for financial services within the CSDDD, as a hasty review would not have allowed sufficient time to properly assess the implementation and created regulatory uncertainty.
The statement continued: "While delaying CSRD reporting and introducing a partial “opt-in” regime for EU Taxonomy reporting is understandable, it does leave asset managers waiting longer for the corporate ESG data needed to make sustainable investment decisions. In the interim, investors will have no choice but to continue to rely on ESG data and ratings sold by third-party providers.
"There is also an important point still needing clarification, namely that the duty to adopt a transition plan for climate change mitigation applies to the business activities of asset managers as companies – but does not affect all assets managed on behalf of investors."
Tanguy van de Werve, EFAMA director general, said: “The current simplification drive by policymakers is an opportunity to ensure cohesion and efficiency across all sustainability regulations. Harmonised definitions and consistent reporting requirements would allow corporates and investors to ‘speak the same language’.
"This is why it is crucial that any changes made to corporate reporting under CSRD, including the “opt-in” regime for EU Taxonomy reporting, are also reflected in financial sector reporting when the European Commission reviews the SFDR.”
