The European Commission recently published the Competitiveness Compass: a plan to “steer the EU towards greater sustainable competitiveness”. One key element of this extensive plan is the simplification and harmonization of EU regulation. Part of this Compass is the introduction of three Omnibus Packages, with the first aimed at ESG reporting and due diligence, including CSRD, EU Taxonomy, CSDDD and CBAM.

While many companies are already well underway in their reporting and broader ESG journeys, this announcement naturally leads to many questions on what exactly will change, and how that impacts running and to be planned projects. On this page you will find relevant insights on the EU Competitive Compass developments provided by our experts. 

Latest EU Sustainability Omnibus updates


Vera Moll

EU Competitive Compass Update | February 28
Vera Moll, Director Sustainability
KPMG In the Netherlands




On February 26th, the first Omnibus package was released, introducing significant changes to sustainability regulations such as the CSRD, EU Taxonomy, and CSDDD.

Approximately 80% of companies previously under the CSRD will now fall out of scope, reducing the number of reporting entities in Europe from 50,000 to 10,000. The implementation date for wave II companies (FY2025) is delayed by 2 years.

At KPMG, we support the Green Deal objectives and encourage companies to continue their preparations. Reporting is not just about compliance. Measuring and steering on sustainability is of strategic importance for both a net-zero and socially just continent, as well as a future-proof organization.

For a technical briefing on the changes, see our latest update article.




Sustainability Omnibus Update | April 3
Gijs de Graaff, Lead KPMG EU Taxonomy Global Taskforce
KPMG in the Netherlands


In this video update Gijs de Graaff shares more on the comment letter issued by KPMG on the Omnibus proposal for the EU Taxonomy.





Key focus areas of the EU Competitive Compass

1. Closing the Innovation Gap

Driving productivity through innovation is crucial for Europe's industrial structure. The Commission will work to create a new dynamism by:
  • Facilitating the establishment and scaling up of start-ups.
  • Creating a deeper and more efficient venture capital market.
  • Easing mobility and retention of talent.
  • Investing in state-of-the-art infrastructures.
  • Boosting innovation and research.

2. Joint Roadmap for Decarbonisation and Competitiveness

Integrating decarbonisation policies with industrial, economic, and trade policies is a powerful driver of growth. This pillar focuses on:
  • Facilitating access to affordable energy.
  • Strengthening the business case for a clean transition.
  • Promoting the competitiveness of clean tech manufacturers.

3. Reducing Excessive Dependencies and Increasing Security

Integrating security and open strategic autonomy considerations into EU economic policies is essential for economic success and competitiveness. This pillar aims to:

  • Develop policies, partnerships, and investments to ensure economic security, resilience, and strategic interests.
  • Strengthen defence industrial capabilities through pan-European cooperation.
  • Improve preparedness for economic and security challenges.

Horizontal Enablers of Competitiveness

The horizontal enablers are designed to reinforce competitiveness across all sectors, providing a strong foundation for the transformational imperatives of the Competitiveness Compass.
 
  1. Simplification Omnibus Packages

    This enabler focuses on streamlining regulations and processes to reduce administrative burdens. By simplifying the regulatory environment, businesses can operate more efficiently and focus on growth and innovation.

  2. Single Market Strategy

    Removing barriers within the Single Market is essential for creating a seamless and efficient market. This enabler aims to ensure that goods, services, capital, and people can move freely across the EU, fostering economic integration and competitiveness.

  3. Financing

    Access to financing is crucial for businesses to support growth and innovation. This enabler ensures that businesses have the necessary financial resources to invest in new technologies, expand operations, and compete globally.

  4. Skills and Quality Jobs

    Promoting skills development and creating quality job opportunities are key to maintaining a competitive workforce. This enabler focuses on enhancing education and training programs to equip workers with the skills needed for the future economy.

  5. Competitiveness Coordination Tool

    Better coordination between EU and national policies is vital for achieving common goals. This enabler aims to align policies and initiatives across different levels of government to ensure a cohesive and effective approach to competitiveness.

Next steps: what should you do

If the proposal goes ahead as planned, this means a significant decrease of the number of in scope companies. At the same time, the strategic benefit of structurally collecting relevant steer information on sustainability and effectively managing sustainability related impacts, risks and opportunities does not disappear. In a world increasingly seeing the impact of climate change, biodiversity decline and social unrest, a focus on sustainability is not (just) a compliance exercise but a strategic endeavour. 

We recommend companies to first make a structural assessment of what the factual compliance situation is and monitor developments carefully. Based on the new compliance context and your ambition as a company, new priorities and the scope and pace of your sustainability reporting project can be determined. 

All of the above mentioned proposals could be subject to change as they progress through the European Parliament, the Council of the EU and are transposed into national law. We'll continue to monitor the developments and share updates.

Read our comment letter on the proposal to amend the delegated acts on the EU Taxonomy.

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