The majority of EU-based businesses favour maintaining more extensive and broadly applied sustainability reporting and due diligence regulations than those proposed under the European Commission’s Omnibus simplification proposals, according to a new survey by climate think tank E3G and conducted by YouGov. This includes a lower threshold for the companies covered by the regulations and mandatory transition plans.
YouGov surveyed over 2,500 businesses in Germany, France, Italy, Poland, and Spain, encompassing 1,988 SMEs with fewer than 250 employees, 170 companies with 250-999 employees, and 385 large companies with more than 1,000 employees.
The survey coincides with ongoing debates among European lawmakers regarding the final form of the Omnibus I package. This package suggests significant amendments to regulations including the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), aiming to ease the regulatory load on companies.
Despite the reporting and due diligence demands, many businesses recognise the value of sustainability regulations. Companies are nearly three times more likely to agree than disagree that environmental sustainability boosts competitiveness. Larger companies are particularly supportive, with over two-thirds agreeing that the EU should set a global standard for sustainability in business practices, compared to only 10% who disagree.
One of the package’s most notable proposals is to exclude most companies from the CSRD regulation, limiting it to businesses with more than 1,000 employees, down from the current threshold of 250. It also aims to reduce the amount of information reported under the regulation and focus CSDDD’s due diligence requirements on direct business partners. Additionally, the proposal seeks to restrict the information businesses can request from smaller supply chain companies. Some lawmakers have suggested even higher company size thresholds for the regulations and removing requirements for climate transition plans.
However, the survey indicates strong business support for retaining many elements of the regulations likely to be removed through the Omnibus initiative. For instance, 70% believe the minimum company size threshold for mandatory sustainability reporting should be 1,000 employees or fewer, with half favouring 500 employees or fewer. Only 15% support a threshold above 1,000 employees. Six out of ten respondents support sustainability reporting, provided the requirements are proportional to business size and the data is meaningful, including over half of SMEs and 70% of companies with 250-999 employees.
More than half of companies across all sizes agree that large companies should be permitted to request relevant sustainability data from smaller suppliers, as long as it is proportionate. Businesses also see value in stringent due diligence rules, with most agreeing that such regulations would likely lead large companies to prefer suppliers from the European Economic Area over non-European companies. Companies with supply chains outside the EU are the most likely to agree, at 62%, with only 13% disagreeing.
Regarding transition plans, 63% of respondents believe it is fair to require large companies to implement plans for transitioning to a green economy.
While the Omnibus initiative seeks to restrict sustainability due diligence requirements to direct supply chain partners, indirect businesses further up the supply chain are most commonly cited as sources of human rights or environmental risks, at 41%, compared to only 18% citing direct business partners as the primary risk source.
Jurei Yada, Director and Head of EU Sustainable Finance at E3G, commented: “Policymakers are operating under the false assumption that businesses want to get rid of sustainability obligations. This survey blows that narrative out of the water. European businesses don’t see sustainability as red tape or a box-ticking exercise but a genuine driver of competitiveness, and an area where businesses and EU policymakers should lead the charge globally.”
[Click here](https://www.e3g.org/publications/what-european-business-leaders-think-about-the-eus-corporate-sustainability-and-due-diligence-rules/) to access the survey.
