The European Central Bank (ECB) has expressed serious concerns over the European Commission’s “Simplification Omnibus” proposal, which aims to significantly reduce the scope of the Corporate Sustainability Reporting Directive (CSRD). The proposal suggests limiting mandatory sustainability reporting to companies with over 1,000 employees and revenues exceeding €50 million, potentially exempting approximately 80% of firms currently covered. The ECB argues that this reduction would diminish the availability of standardized and reliable sustainability data, hindering investors’ ability to assess environmental risks and potentially leading to uninformed investment decisions. The central bank emphasizes that such data is essential for financial stability and effective monetary policy, especially given the profound implications of climate-related risks on the economy.

In its opinion, the ECB recommends maintaining mandatory reporting for companies with 500 to 1,000 employees, utilizing simplified standards tailored to their capacities. It also criticizes the proposal to eliminate sector-specific reporting standards, highlighting the importance of such information for financial institutions to assess companies’ transition readiness. Furthermore, the ECB warns that expanding CSRD requirements to certain non-EU companies could create data gaps and competitive disadvantages for EU firms.