On February 5, the IIF submitted an input paper to the European Commission with perspectives on how to simplify the EU’s sustainable finance framework and reporting requirements to support competitiveness and sustainable prosperity.

IIF members welcome and support the Commission’s commitment to set out concrete actions in H1 2025 that would reduce reporting obligations by at least 25%. The IIF views the anticipated Simplification Omnibus proposal, which is expected to facilitate the simplification of several key pieces of legislation including the CSRD, CSDDD, and Taxonomy regulation, as a welcome opportunity to improve the clarity, consistency, efficiency and effectiveness of the EU’s sustainable finance framework.

Urgent revisions to the EU sustainable finance rules are needed to provide a simpler and more effective framework that supports competitiveness. The EU’s prescriptive approach to net zero transition has led to the development of an expansive and complex policy and regulatory framework. This imposes significant burden on companies domiciled or doing business in the EU, impeding their capacity to achieve the Union’s transition goals while also remaining competitive. While keeping climate ambition high, policymakers should take bold steps to rationalize sustainability disclosure, reporting, due diligence, and other requirements.

The IIF paper includes the following specific recommendations:

• Delay implementation and pause new rulemaking until the Omnibus process is complete, which many IIF members think would support a smoother Omnibus process.
• Address fundamental problems with the CSRD.
• Halt development of financial sector-specific sustainability reporting requirements.
• Remove the Green Asset Ratio from reporting requirements.
• Substantially revise the CSDDD to address issues like litigation risk.
• Streamline transition plan requirements and align with ISSB standards.
• Ensure uniform application of standards across EU member states.