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Amid widespread speculation about the EU Omnibus Simplification Package, this piece offers a practical perspective on CSRD reporting. Businesses don't need the challenge of hitting a moving target — what they need is a healthy dose of pragmatism to get the job done efficiently.
The Corporate Sustainability Reporting Directive (CSRD) was adopted by the European Parliament on November 10, 2022, with a significant majority: 525 votes in favor, 60 against, and 28 abstentions. The directive entered into force on January 5, 2023.
On November 8, 2024, European Commission President Ursula von der Leyen announced an Omnibus law to streamline the European Green Deal. The law would target three main regulations: CSDDD, CSRD, and Taxonomy Regulation. The initiative aims to reduce bureaucracy and cut reporting requirements by 25% by mid-2025.
The Omnibus Simplification Package presentation is scheduled for February 26, 2025. France, and Germany economy ministers are working together on reducing regulatory burden. The Omnibus proposal faces opposition from 170+ human rights and environmental organizations and 90+ investor organizations.
On January 20, 2025, Vice-President Séjourné described the proposal as a "shock of simplification", stating "we keep the climate objectives but we're changing the path for companies to get there by eliminating reporting." This statement sparked widespread uncertainty among stakeholders. Séjourné and his team later clarified: "Those who believe CSRD will be eliminated are over-interpreting the statement; we want to maintain CSRD objectives while simplifying by removing certain obligations."
Also, on January 20, 2025, a coalition of major European companies, investors, and industry associations — including Nestlé, Unilever, Mars, DP World, NEI Investments, Ferrero, Primark, L'Occitane, Signify, the Ethical Trading Initiative, and the Global Network Initiative — addressed a letter to European Commission leaders. The signatories emphasized that companies have already invested resources to comply with the new requirements and urged the Commission to publicly clarify that the Omnibus package would not allow renegotiation of already agreed-upon texts.
While simplification efforts are welcome, companies should not be subject to counterproductive regulatory uncertainty caused by political indecision. Instead, they should focus on building necessary capabilities within a stable regulatory framework. Any adjustments should reduce overlaps and streamline processes while maintaining essential objectives — through careful consideration rather than hasty responses to lobbying pressure. Recent unfortunate political declarations demonstrate a concerning disregard for companies that are investing resources to prepare for sustainability transparency.
From a legal perspective, the EU Commission's options for modifying CSRD are limited. A new legislative proposal would require extensive consultation and face significant political hurdles, given the broad consensus that supported CSRD's initial adoption. Adjustments through delegated acts are feasible but inherently limited in scope. These acts allow the Commission to clarify technical details, reporting standards, or sector-specific requirements but cannot alter foundational elements of the directive, such as its scope, double materiality principles, covered topics, or implementation timelines.
Double materiality analysis offers a practical approach to streamline reporting while maintaining its value. By focusing on the most significant indicators, organizations can efficiently allocate their resources to areas with the greatest impact. For example, experience shows that a well-conducted materiality assessment can reduce the number of data points to be reported by a factor of three, making the reporting process much more manageable. It has been demonstrated that the double materiality can be largely automated as well, further reducing the burden while ensuring comprehensive coverage of essential metrics.
When it comes to preparing the CSRD report itself, organizations can achieve both transparency and efficiency by adopting new technologies that eliminate bureaucracy. AI-powered reporting software has proven to effectively automate data collection and reporting processes. Experience shows that, with almost zero effort — simply by providing existing documents and readily available information — software can automatically generate CSRD reports that are 70% or more complete. Additionally, real-world examples demonstrate that, with the right tools, a single CSRD topic can be fully written in a few days by one person.
Most importantly, CSRD compliance offers strategic advantages beyond mere regulatory adherence. Companies that get started early and embrace these requirements with a great deal of pragmatism often discover opportunities for operational improvements, innovation, and enhanced competitiveness.
CSRD compliance offers strategic advantages beyond mere regulatory adherence.
While dithering politicians debate changes to sustainability regulations, Karomia offers corporations a reliable shield against regulatory uncertainty. Our software provides a robust foundation that adapts seamlessly to any modifications in reporting requirements, ensuring your sustainability transparency efforts remain protected and valuable.
At its core, Karomia automates double materiality assessment and sustainability reporting, effectively eliminating bureaucratic overhead. This automation allows sustainability teams to focus on what truly matters - improving their business's sustainable performance and building competitive advantage, rather than wrestling with compliance paperwork.
The platform's flexible architecture is specifically designed to accommodate an evolving regulatory landscape. All knowledge and data captured within Karomia can be effortlessly repurposed across different reporting frameworks. When regulations change, our software handles these transitions automatically, preserving your work and protecting your investment.
Most importantly, Karomia serves as an autonomous knowledge system that streamlines compliance while delivering strategic value. It expedites regulatory requirements, performs comprehensive materiality assessments, and generates solid factual foundations for executive decision-making. This enables companies to focus on building sustainable competitive advantages for the long term, regardless of how regulatory requirements may shift with political winds.
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