Search for:
ESG

European Union: European Commission releases its Competitiveness Compass – implications for sustainability reporting

By and 2 Mins Read

In brief

The European Commission’s Competitiveness Compass (“Compass“) was published on 29 January 2025. It sets forth the European Commission’s priorities for the next five years with a clear ambition to make Europe a leader in future technologies, services, and clean products. The policy priorities are defined around three pillars: (i) Innovation, (ii) Decarbonisation and (iii) Security.

Key takeaways

As a key enabling measure, the European Commission reiterates its commitment to cut “red tape” across the economy, with the aim of reducing regulatory and administrative burdens imposed by legislation by at least 25% for all companies, and at least 35% for SMEs, potentially saving around EUR 37.5 billion in recurring costs.

In the area of sustainability reporting, the European Commission is confirming that on 26 February 2025,a “Simplification Omnibus package” is going to be presented, which will simplify the obligations under “sustainable finance reporting, sustainability due diligence and taxonomy regulations”. Unlike earlier communications on the topic, the Compass no longer explicitly refers to the three flagship legislative acts, namely CSRD, EU Taxonomy and CSDDD. Whether this means that other acts (such as SFDR) may also form part of the proposals, is unclear at this point. Part of the package to be released on 26 February 2025 will also be a proposal for a new definition of small mid-caps to tailor regulatory simplification for companies larger than SMEs but smaller than large companies.

Baker McKenzie will publish an assessment of the full extent of the simplification measures when the Simplification Omnibus is published on 26 February 2025. For more information, please contact our team of experts. 

***** 

Bidi Badcock-Scruton, Trainee, has contributed to this legal update.

Categories:
Author

Eva-Maria is a partner in our Austrian corporate / M&A group and a member of our global sustainability practice. She acts as global lead sustainability partner for our financial institutions industry group, heads Baker McKenzie's capital markets practice in Austria and is a member of our EMEA steering committee for capital markets. Eva-Maria is a dual-qualified lawyer, admitted to practice in Austria and New York. Prior to joining Baker McKenzie's Vienna office in 2008, Eva-Maria worked in the New York, Paris and Frankfurt offices of a well-known US law firm.

Author

Gabrielle advises multinationals on how to manage sustainability legal risks and translate them into reputation capital, good governance, business strategy and stakeholder confidence.
After over a decade in tax, Gabrielle pivoted and is currently the lead associate in London advising global businesses on sustainability laws compliance, disclosures and global strategy, greenwashing risks and mitigation strategies, sustainability governance and other climate and human rights related issues. Her experience spans complex legal advisory, management of disputes, stakeholder and government engagement, business risk reviews, governance and policy advisory and courtroom advocacy.
Gabrielle is qualified in the EU and in Brazil, having started her career with Baker McKenzie in 2008 as a trainee. She is frequently invited to speak in external events and is seen as a thought leader in the sustainability legal space.

Related Posts