Live

Article by Francesca Moriero – Journalist, Fanpage.it

In Brussels, discussions are reopening over the future of European rules on corporate sustainability. Following the European Commission’s proposals to ease the regulatory burdens currently burdening businesses, the European Parliament’s rapporteur, Jörgen Warborn, from Sweden, is pushing for further tightening. His goal is clear: to drastically reduce the number of companies subject to environmental and social standards, in the name of European global competitiveness. This approach, if approved, would mark a significant step backwards in the Union’s strategy for a responsible and ecological transition.

Last February, the European Commission presented an initial package of measures, called the “simplification omnibus,” which envisioned exempting all companies with fewer than a thousand employees from ESG rules. This would exclude over 80% of the approximately 50,000 companies currently affected. This proposal had already drawn criticism from environmental groups, trade unions, and investors, concerned about a potential reduction in transparency and control over supply chains.

Warborn’s Counteroffensive

Warborn, a member of the European People’s Party, has decided to go further. In his amendment submitted to Parliament, he now proposes raising the thresholds even further, ensuring that the rules apply only to companies with at least 3,000 employees and a turnover exceeding €450 million. In a statement released last week, Warborn declared that “Europe is losing ground in global competition” and that his proposal aims to “reduce costs for businesses” and “further simplify what the Commission has already envisaged.”

“We don’t abandon our values when it comes to sustainability. We make them work. The goal is to simplify, not weaken, the European sustainability agenda,” Warborn added.

A divided Parliament and a delicate negotiation

The proposal would now open a phase of debate within the European Parliament: the groups will be able to submit alternative amendments, and the final text will also have to be negotiated with the governments of the 27 member states. The emerging scenario is therefore highly polarized: on the one hand, some right-wing members are even calling for the complete repeal of corporate sustainability regulations; on the other, the Socialist and Green groups have declared their intention to defend the current rules, which they consider essential to ensuring accountability and consistency with the EU’s climate objectives. Furthermore, tensions are also reportedly fueled by external pressure: French President Emmanuel Macron and German Chancellor Friedrich Merz have already openly called for the repeal of the Supply Chain Due Diligence Directive, which requires companies to monitor compliance with human rights and environmental regulations throughout the production process. The request, welcomed by more traditional industrial sectors, would, however, represent a sharp reversal of the commitments made in recent years under the Green Deal.

The opposing front: investors and civil society alarmed

The backtracking on ESG standards is certainly not without consequences: some institutional investors, as well as various civil society groups, have expressed concern about a potential loss of credibility for the European market. According to these actors, loosening the rules would reduce the Union’s ability to attract sustainability-oriented investments, precisely at a time when global finance is moving in the opposite direction, rewarding companies and countries with high environmental and social standards. Warborn rejects these criticisms, arguing that his proposal does not aim to weaken standards, but to free up resources that companies can allocate to innovation and development. However, the political issue remains: if the amendment were to be approved, it would send a strong signal of a downsizing of the European regulatory framework for corporate responsibility.

In the coming months, therefore, much more than the fate of a single package of regulations will be decided. The choice made by the European legislator will indicate whether the Union intends to continue to be a global point of reference in the transition to a sustainable economy, or whether it will prefer to slow down, so as not to displease large businesses and remain competitive in the international arena.

Written by

Shape the conversation

Do you have anything to add to this story? Any ideas for interviews or angles we should explore? Let us know if you’d like to write a follow-up, a counterpoint, or share a similar story.

Write a counterargument article Write a related article