NFU Press Release: European Parliament Draft Report Proposes Major Regulatory Dilution of CSRD and CSDDD
The European Parliament’s draft report proposes sweeping changes to two cornerstone EU sustainability directives. Nordic Financial Unions (NFU) believes these changes are unlikely to ease administrative burdens meaningfully. Instead, they risk hampering green investment and weakening measures to manage climate-related risks.
Jörgen Warborn, Member of the European Parliament (EPP, Sweden) and lead rapporteur for the European Parliament, has published his draft report. He had the opportunity to make targeted adjustments that would preserve the integrity of the sustainable finance framework and tighten enforcement, but decided to make proposals for extreme changes to two key EU sustainability frameworks: the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).
His proposals include raising the threshold for CSRD reporting obligations to companies with at least 3,000 employees and €450 million in net turnover. He also calls for the complete removal of the requirement for companies to prepare climate transition plans, currently included in the Commission’s CSDDD proposal.
"Rolling back the scope of the CSRD and CSDDD risks dismantling one of the EU’s most important steps toward consistent, reliable, and decision-useful sustainability data.” NFU General Secretary, Carin Hallerström, commented on the changes proposed by the JURI rapporteur. “Without comprehensive ESG disclosures—especially from SMEs—financial institutions are left navigating sustainability risks blindfolded, while still being held accountable under stringent reporting obligations.”
Key proposals in the draft report also include:
- Simplified reporting obligations:
Under both the CSRD and the CSDDD, companies would be permitted to declare that they lack, or only partially possess, certain data—provided they can demonstrate reasonable efforts to obtain it. - Streamlined due diligence for business partners:
The CSDDD would limit the requirement for companies to collect information from direct business partners to specific conditions. Instead, firms would primarily rely on “reasonably available” information, such as publicly accessible sources or data from past collaborations
NFU acknowledges the need to simplify second level rules, but warns that these proposals amount to deregulation, not simplification.
“Deregulation would undermine the integrity of the EU’s sustainable finance framework and disrupt the critical link between sustainability reporting and financial regulation. EU must stay the course and build on the CSRD and CSDDD and not weaken or destroy it just as its benefits are beginning to materialise." Anna-Delia Papenberg, NFU’s EU Coordinator, concludes.
