Omnibus: Reduction of the data points of the European sustainability standards

Deutsches Aktieninstitut welcomes the European Commission's omnibus proposal to simplify and streamline the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Taxonomy Regulation published on February 26, 2025. With a view to the intended reduction of reporting requirements, there is still a significant need for improvement. 

‘With the Omnibus proposal, the European Commission has taken a big step towards reducing the burden on companies with the European Supply Chain Due Diligence Directive. In the case of the EU Sustainable Finance Disclosure Regulation, on the other hand, there are no sufficient measures to reduce the reporting requirements. But these are necessary. The reporting companies urgently need relief,’ explains Henriette Peucker, Chief Executive of Deutsches Aktieninstitut. 

Regarding the CSDDD, Deutsches Aktieninstitut welcomes, among other things, the removal of civil liability and the focus of due diligence obligations on direct business partners in the supply chain. It is also positive that the EU Commission plans to discontinue the sector-specific standards. This also applies to the adjustment of the scope of the CSRD and the EU Taxonomy Regulation, according to which in future only companies with 1,000 or more employees (previously 250) and a turnover of more than 50 million euros or a balance sheet total of more than 25 million euros will be required to report. 

However, we are critical of the fact that, with regard to large, listed companies, insufficient relief is provided for in the reporting requirements. These companies are still obliged to report in accordance with the EU Taxonomy Regulation. It is also unclear to what extent there will be a comprehensive reduction of the data points in the ESRS, to which the EU Commission has committed itself in the Q&A document. The electronic tagging requirement for sustainability and financial information is also set to remain. 

Abolition of the electronic tagging requirement

The electronic tagging requirement (iXBRL tagging) under the European Single Electronic Format for financial and non-financial reporting is complex. It results in a high level of effort for companies and creates legal uncertainty without providing any additional benefit for investors and the public. Sophisticated AI tools do not rely on electronic labelling, as they can also extract and evaluate the published information from PDFs. 

CSRD as the cornerstone of corporate reporting

The CSRD and the associated European Sustainability Reporting Standards (ESRS) are the cornerstone of sustainability reporting. In the future, all information for other reporting frameworks, such as the Sustainable Finance Disclosure Regulation (SFDR), should be derived from the CSRD data. Therefore, Deutsches Aktieninstitut advocates including the SFDR in the Omnibus procedure. 

Significant reduction of data points

Deutsches Aktieninstitut proposes replacing the European sustainability standards with the standard for listed small and medium-sized enterprises (LSME standard) or a correspondingly lean reporting standard. This way, the 1,100 data points of the ESRS can be reduced by almost half. The standard should apply equally to large listed and unlisted companies. 

To ease the reporting burden on companies, Deutsches Aktieninstitut also advocates that the European Commission allow companies to start with the International Sustainability Standards Board's IFRS S2 climate standard when reporting on climate in view of the ESRS E1 climate standard. If necessary, the European Commission could expand the international climate standard.

‘The integration of international climate standards into the ESRS reduces duplication in sustainability reporting and paves the way for harmonised international sustainability standards in the future, which we support in the interests of the competitiveness of European companies,’ emphasises Peucker.