"Guest Post: As EU Sustainability Rules Come Under Siege, Businesses Rally To Their Defence", 22 July 2025

As the EU announced its 2040 climate target and national climate commitments are under revision, the role of business in delivering that ambition is under renewed scrutiny...

The truth is: many European businesses are already on board. Contrary to the dominant narrative, they are not resisting climate rules — they are actively calling for strong, coherent sustainability rules — not less regulation, but better, simpler regulation to guide their transition. These businesses know that competitiveness and climate ambition must go hand in hand...

Leading companies and investors launched a joint call for ambitious sustainability reporting rules under the Omnibus package, asking for a coherent, forward-looking sustainable finance framework that empowers companies to prepare for — and benefit from — the net-zero transition.

The key message is that while there is a need for simplification, these rules should be ambitious, usable and consistent across the EU. Policymakers should resist efforts to dismantle the very foundations of these rules.

Excluding thousands of companies from sustainability reporting and due diligence obligations, as the EU is currently trying to do under changes to CSRD (Corporate Sustainability Reporting Directive) and CSDDD (Corporate Sustainability Due Diligence Directive), would effectively remove them entirely from the transition conversation...

Equally important, the statement affirms the need to retain robust, mandatory transition planning under the Omnibus proposal. As Europe sets its 2040 climate target and submits its updated NDC this year, businesses must have clear guidance and accountability tools to play their role...

One particularly risky idea on the table in the Commission’s Omnibus proposal is to limit value chain reporting by capping the number or size of companies required to disclose. This may appear as simplification on paper, but it comes with high systemic costs. Such a cap would place additional burden and costs on large firms, forcing them to prove negative compliance and trace gaps, while also blinding the system to material upstream risks and limiting their engagement with suppliers...

European companies are already publishing science-based transition plan aligned with disclosure standards. Ingka Group (IKEA) leverages sustainability reporting to engage their suppliers to achieve climate neutrality across their value chains.

Financial institutions like Allianz SE and Nordea use their and investees’ transition plans to steer financing towards climate goals.

These are not symbolic gestures or compliance box ticking— they are strategic shifts grounded in transparency, accountability, and long-term value creation. The rules, when stable and well-designed, support this direction of travel and ensure others can follow with confidence. The proposed Omnibus changes are behind the curve and risk misaligning business momentum with EU goals.

Europe should not allow misinformation, lobbying from abroad, or outdated assumptions to shape the future of its economy. We have a once-in-a-generation opportunity to build a green, modern and competitive Europe — but only if we bring all businesses with us.