On April 14, 2025, the Institute of International Finance (IIF) published a Position Paper on the European Commission’s Omnibus Proposals on Sustainability Reporting and Due Diligence.

IIF member financial institutions broadly welcome the European Commission’s Omnibus proposals published on February 26, 2025, and strongly support the Commission’s commitment to reviewing and simplifying the EU sustainable finance framework and support several of the Commission’s proposals. However, IIF member firms are concerned that the current Omnibus proposals do not yet adequately address some of the most challenging burdens and obstacles faced by financial institutions operating within the EU, including those stemming from prudential requirements and supervisory expectations. In order for the Commission’s objective of simplification and burden reduction to be delivered for financial institutions, and to ensure consistency of EU-wide requirements and expectations, the EU’s financial sector regulatory and supervisory framework should also be reviewed in the context of the Simplification Omnibus process. 

The IIF position paper includes the following high-level recommendations:

• The prudential and supervisory frameworks need to be brought in scope of the Omnibus review process to achieve a consistent outcome; at the least, a separate but aligned review needs to be conducted in parallel. This would ensure that: (1) the Commission’s simplification objective is executed; (2) there is clear reconciliation of any points of misalignment; and (3) any overlap or duplication is eliminated.
• Uncertainty about important details of the Omnibus proposals needs to be addressed.
• Opportunities to foster international alignment should not be missed, for example with the IFRS S1 and S2 standards developed by the International Sustainability Standards Board (ISSB).
• Several elements of extraterritoriality in the EU sustainable finance framework have not been addressed in the Omnibus proposals, resulting in continued additional complexity and burden for non-EU headquartered firms that seek to contribute to the EU economy. We urge the Commission to investigate and explore avenues for equivalence and interoperability as part of the Omnibus process, recognizing the core objective of achieving a comprehensive yet simplified reporting framework.

Additionally, the IIF position paper summarizes current IIF member views on key challenges and outstanding issues with the Omnibus proposals, which require attention and resolution.

Taking action to implement the IIF recommendations could enable the EU to remove impediments to growth and competitiveness across the Union, while still maintaining its leadership in sustainable finance.