Concerns Grow Over Deregulation and Impact on Corporate Sustainability Rules

European trade unions and environmental groups have raised alarms over the European Commission’s recent consultations on streamlining corporate sustainability reporting. These talks, held in Brussels, were criticized as being skewed in favor of business interests. This leads to concerns about the deregulation sustainability impact, potentially weakening essential sustainability regulations.

The “simplification roundtable,” led by Economy Commissioner Valdis Dombrovskis, has caused significant frustration among civil society groups. A leaked participant list revealed that business representatives and trade associations outnumbered civil society voices. Isabelle Schömann, deputy general secretary of the European Trade Union Confederation, called the event a “rigged” process. She accused the EU of pursuing a deregulation agenda that can impact sustainability by reducing corporate responsibilities.

The Risk of Weakening Sustainability Standards

Civil society groups fear that the Commission’s efforts to reduce the regulatory burden by 25% could lead to a major rollback of key directives, including corporate sustainability and due diligence rules. Schömann highlighted that reopening these directives could open the door to altering important provisions. These alterations could affect reporting thresholds, corporate liability, and accountability obligations, thereby demonstrating the deregulation sustainability impact feared by many.

While the European Commission insists that its objective is not to rewrite legislation, the looming review of corporate sustainability rules has already raised concerns. The recent publication of the Commission’s strategy to enhance EU competitiveness added further fuel to the debate. It included promises of comprehensive regulatory reforms, such as a series of omnibus proposals that impact sustainability.

Pressure for Transparent and Inclusive Policy Making

Maria van der Heide, head of EU policy at ShareAction, warned that the Commission’s simplification efforts could dismantle Europe’s sustainability framework. She cautioned that the rushed regulatory reforms might undermine the EU’s Green Deal. Therefore, the deregulation sustainability impact could be detrimental to European climate policy.

In response to these concerns, several civil society groups wrote to the Commission, urging greater transparency and inclusiveness in the law-making process. They argued that the current approach risks violating EU law by bypassing essential public consultation and evidence-based policy development.

The Commission’s first omnibus package, expected on February 26, will be accompanied by a Clean Industrial Deal aimed at fostering economic growth while maintaining environmental standards. However, stakeholders remain wary about the long-term impact on Europe’s sustainability regulations. They fear negative deregulation sustainability impact.