Jurist EU proposes to scrap sustainability reporting laws for businesses

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The European Commission (EC) proposed to simplify sustainability rules for businesses, on Wednesday, arguing that complex regulations and “red tape” are preventing EU businesses from maintaining competitiveness and hindering economic investment. The primary proposal is to delay the application of the new Corporate Sustainability Reporting Directive (CSRD) law for applicable companies, as well as other sustainability laws that form part of the European Green Deal.

The EC’s proposal forms part of this cross-cutting. The proposal was made by Commissioner Maria Luis Albuquerque and Commissioner Valdis Dombrovskis at the European Economic and Social Committee (EESC) plenary debate. At the debate, Dombrovskis said:

While our commitment to securing the green transition has not wavered, we must acknowledge that this has come at a cost, generating a large regulatory burden on people and businesses. As we take stock, we se that this accumulation of rules, and their increased complexity, are limiting our economic potential and our prosperity.

Dombrovskis proposed to “free” 80 percent of companies “under the scope of the CSRD”, delay the application of the corporate sustainability due diligence, lift the mandate “to adopt sectoral-specific standards”, amend rules within the EU taxonomy on sustainable investments, and to instate “unprecedented simplification changes to the Carbon border Adjustment Mechanism”.

The European Climate Law, better known as the EU Green Deal Plan was endorsed by EU Parliament in 2021. It set out a comprehensive plan to help the EU achieve climate neutrality by 2050. In January 2025, the EC announced its “Competitive Compass” framework, aiming to balance sustainability with competitiveness through a focus on three pillars: innovation, decarbonization, and security. The EU said that “cross-cutting” actions would be used to achieve this, including the “simplification of regulatory and administrative burdens on firms”.

Organizations, such as BusinessEurope and the EU Employers Group, have welcomed the Competitive Compass, praising the initiative for its focus on innovation and reducing regulatory burdens. Other parties, such as the president of the EU Socialists and Democrats, Iratxe García, have criticized the initiative for failing to properly address problems and undermining the Green Deal.

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