The European Commission recently introduced an omnibus package of proposals aimed at simplifying sustainability reporting and due diligence obligations.
The EU ESG reporting framework is bold making it challenging for companies to prepare. The European Commission is proposing to refine regulations to be more pragmatic and more focused on the ultimate reporting goal: Achieve Green transformation as discussed in the EU Green Deal.
The omnibus legislation aims to foster a more favorable business environment, reduce regulatory burdens, and help companies transition to a sustainable economy, aligning with the EU's Green Deal objectives. This initiative is part of a broader effort to enhance the EU's competitiveness by reducing reporting burdens without undermining policy objectives. KPMG firms stand ready to assist clients through their sustainability reporting journey and will advise to find the right reporting strategy.
We recognize that regulatory shifts can shake up your business as usual. To help support you, below you will find a curated a collection of resources, recommendations, and actionable steps to guide you through your sustainability strategy—no matter where you are in the process.
Watch this webcast which aims to break down the first Omnibus proposal and explore what it means for your company.
Key discussion topics:
Preparing for the EU Omnibus: Practical advice for non-EU-based companies
Watch this webcast which aims to:
Under the proposals, only large companies with more than 1,000 employees would be in scope of the CSRD and therefore required to report under ESRS. The EU Commission estimates this would decrease the number of companies in scope by approximately 80 percent.Further, under a so-called 'Stop the clock' proposal, mandatory ESRS reporting for second- and third-wave companies would be postponed for two years.
Depending which of these wave you currently sit in we are suggesting the following course of action
What are some of the steps you can take to avoid losing momentum on your sustainability journey.
For most companies who have completed a Double materiality assessment (DMA)
A key step will be developing a pragmatic climate transition plan using the Transition Plan Taskforce (TPT) framework. This approach helps you prioritize areas within your control and influence, while acknowledging that some factors are beyond your reach, so they shouldn’t consume undue management time or resources.
For companies who have not completed a DMA
A key step will be to prioritize a financial materiality exercise. This strategic exercise can uncover risks and opportunities that CSOs and CFOs may want to know about and address.
Data challenges aren’t disappearing
For those data points you identified as financially material, and ultimately you want to embed in to your management thinking —use the Omnibus package outcomes to focus on resolving issues with the data that truly matters. This can help strengthen your strategic decision-making and can optimize cost.
Sustainability technology tools have advanced significantly in the past year. With the extra time potentially available, assess which technology solutions suit your needs best. Start conversations with your CIO and CFO to align on this.
Look for opportunities
With the potential extra time or resource that may be freed up, explore how you can redeploy or refocus to drive value-adding Decarbonization or strategic sustainability initiatives
For CSO/Head of Sustainability
Beyond ESRS, what are the core data points you still need to help run your business?
Will this Omnibus proposal potentially free up capacity or resource in the short or medium term?
How do you redeploy capacity in support of driving your transition initiatives?
For CEO
Going beyond reporting, where can sustainability drive a competitive advantage?
How can we focus sustainability actions on performance improvement add value creating activity?
For CFO
Where does sustainability fit into your wider reporting strategy?
Are any of your financial commitments or investor narrative tied to sustainability data or reporting?
Were you reliant on sustainability reporting to manage material financial and business risk?
For CIO
For your sustainability data points, where in the business is that data coming from and who manages it?
What tools & system architecture is needed to ensure you drive value from your sustainability data?
