Draghi report on "the future of European competitiveness": exit the CSRD?

The second part of this report which reviews existing European horizontal policies, contains a section dedicated to the simplification of rules. And it discusses the major administrative burden that sustainability reporting and duty of care represent for companies.

"The EU sustainability report and duty of care framework are a major source of regulatory burden, amplified by a lack of benchmarks to facilitate the application of complex rules and clarify the interaction between various pieces of legislation. The aim of this framework is to strengthen the rules concerning the environmental and social information that companies must disclose".

"This entails a materiality compliance cost for EU21 companies, ranging from 150,000 euros for unlisted companies to 1 million euros for listed companies. In addition, risks of 'over-compliance' (e.g., 'over-reporting') exist throughout the value chain," the report continues.

"Other changes to this framework, including the sector-specific reporting standards required by the CSRD, could raise compliance costs," the report further notes.

What will this report be used for? Answer in a few months: "The report's conclusions will contribute to the to the Commission's work on a new plan for sustainable prosperity and competitiveness in Europe. And in particular, to the elaboration of the new Clean Industry Pact for competitive industries and quality jobs, which will be presented within the first 100 days of the Commission's new mandate", states the European executive.

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