Following a vote by MEPs, only a formality stands in the way of the European Commission’s ESG overhaul.
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The European Parliament today agreed to pause the EU’s flagship ESG regulations, paving the way for negotiations over a wider overhaul of green rules.
MEPs voted on an urgent motion to amend the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) to postpone reporting deadlines for thousands of EU-based companies by at least two years.
The amendment passed by 531 votes to 69, while 17 amendments put forward by various parliamentary groups were rejected.
The EU Council voted to approve the pause last week, but needs to formally approve it again now that Parliament has had its say. An EU official told Lexology PRO that this will be a formality and is likely to be completed in the next few weeks.
The delay to company reporting obligations, some of which are already in effect, is intended to allow the European Commission, Council and Parliament to negotiate over the commission’s Omnibus Directive, which aims to slash the bloc’s sustainability framework for businesses.
The European Commission published the full details of its Omnibus Directive – a long-awaited plan to merge and simplify the core pillars of its ESG framework – on 26 February.
In a brief debate on whether to allow the vote to go ahead on Tuesday, Manon Aubry, an MEP for the Left parliamentary group said the move was a “disgrace.”
“It was the companies and their lobbies who are damaging the planet and harming people who asked for this [delay] and who you are acting on behalf of. It’s a scandal,” she said.
An MEP for the European People’s Party, which lobbied for the Omnibus, said that greater clarity and breathing room was desperately needed by SMEs to “make Europe competitive again.”
The Omnibus proposal has been the subject of fierce criticism from campaigners and some business groups.
Some stakeholders argue that the expedited process of the reforms, which were first mentioned by European Commission president Ursula Von der Leyen last November, and released in full in February, has not allowed for adequate transparency and debate.
So far, the commission has invited external feedback on the proposal only once. Lexology PRO revealed that energy giants ExxonMobil, Total Energies, Eni and Repsol were among the companies invited to behind-closed-doors meetings to discuss the ESG overhaul, in a process heavily criticised for failing to meet transparency standards.
The commission is expected to try to push through negotiations on the Omnibus as quickly as possible, which it says is necessary to simplify regulations and drive European competitiveness.