ByMike O'Sullivan,
Senior Contributor.
Europe’s reputation for heavy regulation is taking a beating. There is a growing consensus in the large economies – France and Germany – that regulation is too severe, and Germany for instance has made an important contribution to the Savings and Investment Union (SIU) process by agreeing to have its financial markets regulator cede some control to the European markets regulator, and France and Germany are working more closely together to pare back EU AI regulation to create European AI champions, with a number of collaborative deals set to be announced in coming weeks.
At the EU parliament level, there have been a number of meaningful votes on ‘Omnibus’ bills – i.e. agreements to simplify and in some cases pare back overbearing regulation. Two stand out. The EU parliament (which now has a rightwards tilt) last week agreed the the Corporate Sustainability Reporting Directive (the CSRD) and the Corporate Sustainability Due Diligence Directive (the CSDDD).
The aim is that these directives will reduce ‘sustainability’ and ‘due diligence’ requirements for European companies. Concretely, CSRD reporting, is being postponed by two years, while CSDDD implementation will be delayed by a year. The package also narrows the scope of the compliance – exempting smaller and mid-sized companies, and cutting the overall amount of ESG reporting.
