Turning climate complexity into competitive advantage for financial institutions | Future Perfect methodology | Ex-UNEP FI Head of Risk | Open to keynote speaking
📢 𝗨𝗽𝗱𝗮𝘁𝗲𝗱 𝗘𝗨 𝗢𝗺𝗻𝗶𝗯𝘂𝘀 𝗔𝗻𝗮𝗹𝘆𝘀𝗶𝘀 – 𝗠𝗮𝗷𝗼𝗿 𝗦𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗦𝗵𝗶𝗳𝘁𝘀 𝗖𝗼𝗻𝗳𝗶𝗿𝗺𝗲𝗱 The Omnibus proposal is officially out, with some major regulatory rollbacks for corporate sustainability in Europe. With changes spanning the CSRD, CSDDD, Taxonomy, and CBAM, the reporting landscape has just changed dramatically. 🔍 𝗪𝗲’𝘃𝗲 𝘂𝗽𝗱𝗮𝘁𝗲𝗱 𝗼𝘂𝗿 𝗰𝗼𝗺𝗽𝗮𝗿𝗶𝘀𝗼𝗻 𝘁𝗮𝗯𝗹𝗲 𝘁𝗼 𝗿𝗲𝗳𝗹𝗲𝗰𝘁 𝘁𝗵𝗲𝘀𝗲 𝗱𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁𝘀—𝘄𝗵𝗶𝗰𝗵 𝘄𝗲 𝗵𝗼𝗽𝗲 𝗮𝗿𝗲 𝘂𝘀𝗲𝗳𝘂𝗹 𝗳𝗼𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀 𝗻𝗮𝘃𝗶𝗴𝗮𝘁𝗶𝗻𝗴 𝘄𝗵𝗮𝘁’𝘀 𝗻𝗲𝘅𝘁. 🚨 𝗪𝗵𝗮𝘁’𝘀 𝗖𝗵𝗮𝗻𝗴𝗶𝗻𝗴? 𝗔 𝘀𝘂𝗺𝗺𝗮𝗿𝘆: 1️⃣ CSRD – Reporting Scope Slashed 🔹 Two-year delay for many companies that haven’t yet reported. 🔹 80% of companies removed from mandatory reporting 🔹 Sector-specific standards scrapped 🔹 ESRS under review for streamlining 2️⃣ CSDDD – Weakened Due Diligence Rules 🔹 Focus only on direct suppliers – removal of full value chain due diligence 🔹 Assessment frequency cut – Required every 5 years instead of annually 🔹 Penalties softened – No references to fines related to global turnover 🔹 Civil liability removed 3️⃣ EU Taxonomy – Reporting Becomes Optional for Most 🔹 Only “very large” companies must report (>1,000 employees) 🔹 80% of companies exempted from Taxonomy alignment 🔹 Partial alignment reporting introduced 4️⃣ CBAM – Simplification and exemptions 🔹 Exemption threshold introduced for importers 🔹 Implementation delayed to 2027 instead of 2026 🔹 Product coverage remains the same for now but may expand in 2026 🔹 Emissions tracking requirements simplified 👉 What is your take—necessary streamlining or a retreat from sustainability leadership? Can a balance be struck between sustainability and competitiveness? I think it can. In fact, I don't think they even should be contradictory. The big question is whether this omnibus strikes that balance. I'm not so sure. #CSRD #CSDDD #EUTaxonomy #CBAM #Sustainability #ESG #SustainabilityReporting #EURegulations #ClimateFinance #CorporateResponsibility
Thanks as always David Carlin. Pondering this overnight. Boards should not be regulatory led. They should be purpose, strategy and risk appetite led. The visible hand of regulation is required where boards are weak on the former. Hopefully there will be many companies who will continue to transition and takes steps in the long term interest of companies, society and the environment. It’s a blow from a policy leadership perspective but many companies in Europe have a strong sense of purpose and are on a trajectory they believe in. I fully agree that sustainability and competitiveness are not mutually exclusive. The EU approach ignores the intense public cost of thinking they are.
Joel Moreland
6mo
What a missed opportunity they salami sliced all four leaving only the CBAM having some impact. This is the worst result as it leaves the other three as bureaucracy without impact (or maybe that was the intention so they can kill them off at a later date). There was room to reform by focusing on the CBAM; completely dropping the taxonomy and combining the supply chain parts of the other two (while dropping transition plans, etc) - real impact plus less bureaucracy.
Peter Howard
7mo
Thanks for compiling David. My suspicion here is that those who thought climate report was a marketing endeavor are happy with this, while those who understand that reporting is prudent risk management will continue to as previously. Regulation works best as a minimum standard anyways, but the unfortunate thing is that this will reduce harmonization in disclosure. If more asset owners demand action from direct investments and asset managers, the pressure will continue.
Vishal L.
7mo
Thanks for sharing. Climate risk don't wait for policies or regulations to come, it will happen! Regulatory rollbacks represent a significant step back from the progress made in corporate sustainability in Europe. By reducing reporting scope, weakening due diligence rules, and making reporting optional for most companies, we risk losing transparency and accountability in the pursuit of sustainability goals. I believe that sustainability and competitiveness can go hand in hand, and it is crucial for regulations to support and encourage companies to prioritize both.
Barry Murphy
6mo
“Can a balance be struck between sustainability and competitiveness? I think it can. In fact, I don't think they even should be contradictory. The big question is whether this omnibus strikes that balance. I'm not so sure” - spot on ! And yes sustainability and competitiveness seen as alternates in a choice is just wrongheaded… and if we cold crack that perception we may make progress
Judith Fiedler
6mo
That’s sth to think of in detail. For me supply chain law while the scope is reduced, brands should act responsible, it’s in their interest to in minimum protect the brands reputation. While administrative burden has been too high agreed, weakening the whole system from my take would not have been necessary as such…
Director - Sustainability Assurance
7moFrom an assurance perspective, I think two elements not addressed here are as important as removing the transition to reasonable assurance: 1. The EU Commission has stated that it will specify through legislative means that assurance practitioners cannot require information from value chain entities not captured by CSRD. This may essentially be a legislated limitation of scope. Corresponding changes to reporting standards may address this issue. 2. The EU Commission will publish targeted guidelines for assurance practitioners on what procedures are needed to meet the limited assurance requirements. How this will align with ISAE 3000 (or ISSA 5000) remains to be seen. While the Commission can specify certain procedures are sufficient for regulatory purposes, the engagement leader retains responsibility for ensuring sufficient work is performed to meet the requirements of the standards. So if the assurance providers disagree with the guidelines, they cannot sign assurance conclusions under the international standards (they can just conclude under local laws) - which potentially weakens confidence in the assurance process overall and creates a lower tier of assurance in the EU compared to globally.