Today, european companies can no longer be content with ad hoc environmental initiatives: they must now integrate sustainability into the heart of their business model, and demonstrate this transparently. In other words, sustainable finance is now essential to accelerate the ecological transition. With this in mind, the European Union has introduced two major regulations: the Green Taxonomy and the CSRD (Corporate Sustainability Reporting Directive). These provisions classify economic activities according to their contribution to climate objectives. However, as the first wave of reports emerge in the year 2025 (based on 2024 data), their elaboration has been strongly criticized. As a result, the European Commission is considering relaxing certain requirements to preserve the competitiveness of European companies (cf : EU Comm., Draghi Report on European Competitiveness, Sept. 9 2024), justifying a debate between strict regulation and flexibility.
A reform in progress: towards a simplification of the green taxonomy and the CSRD
The Green taxonomy, resulting from Regulation (EU) 2020/852 of the European Parliament and of the European Council of June 18, 2020, makes it possible to identify environmentally-friendly economic activities, with the aim of better directing investments towards projects aligned with the EU’s climate objectives, enshrined in the Green Deal.
For its part, the CSRD requires companies to be more transparent about their environmental, social and governance (ESG) performance, with detailed and standardized reporting.
However, in the face of criticism from companies and certain member states, the European Commission recently announced a significant revision of these obligations through the “Omnibus” package on February 26, 2025. This package aims to lighten certain administrative and financial constraints, while maintaining the EU’s environmental ambitions.
Among the proposed changes, is a reduction in the number of companies subject to reporting obligations. Previously, companies with at least 250 employees and sales in excess of €50 million were more broadly concerned. Now, application of the directive may be restricted to those with over 1,000 employees and sales in excess of €450 million, resulting in an 80% reduction in the number of companies subject to the directive. For other companies, optional reporting would be introduced, with a voluntary standard adapted to SMEs (“VSME”).
A simplified regulatory framework
The principle of double materiality, which requires companies to assess both their impact on the environment and the impact of climate issues on their business, would be maintained. However, the European Sustainability Reporting Standards (ESRS) would be significantly simplified. The European Commission would favor quantitative indicators, while reinforcing the distinction between mandatory and voluntary data.
Sectoral standards, which were initially intended to specify industry-specific requirements, would be abandoned. The requirement for reasonable assurance of ESG data would also be removed, limiting the need for external auditing.
Green taxonomy: between obligation and flexibility
The revision of the green taxonomy also aims to facilitate its application, which would be greatly reduced as indicated above. For those below this threshold, a voluntary regime would be introduced, with lighter reporting, limited to sales and CapEx (investment’s budget) indicators, and optional publication of OpEx (financement’s budget).
The European Commission is also considering introducing a materiality threshold of 10% for the eligibility and alignment of indicators, as well as an additional threshold of 25% of sales eligibility for the publication of OpEx alignment.
Deferral of obligations for certain companies
Another key measure in the “Omnibus” package is the two-year deferral of obligations for companies in CSRD waves 2 and 3. In other words, these companies would not be required to publish ESG reports until 2028, to give them time to adapt to the requirements. In addition, the Commission wishes to limit the effect on SMEs by restricting requests for value chain information to the data defined in the voluntary VSME standard.
Opposition between member states
While some member states, notably France and Germany, support these adjustments, others such as Spain and Italy are vehemently opposed. These latter believe that relaxing the rules could weaken the EU’s climate commitments and distort competition between companies subject to the obligation and those that would no longer be.
Strategic issues for companies
To conclude, despite the reduction and the simplification that may bring the “Omnibus” package in the application of a green taxonomy in Europe, complying with these standards remains a strategic opportunity for compagnies. Indeed, they can strengthen their credibility with investors, gain easier access to green financing and anticipate future regulations, and should be clearly considered.
For more informations:
https://assets.kpmg.com/tableau-synthese-propositions.pdf
https://eco-act.com/fr/service/taxonomie-europeenne/
https://www.amf-france.org/fr/le-reporting-de-durabilite-csrd
Étudiante en Master 2 Droit et Gestion des Énergies et du Développement durable à Strasbourg