Empowering ESG Reporting in a Post-EU Omnibus World

The European Union (EU) has unveiled its omnibus directive to simplify the bloc’s sustainability-related rules and reporting obligations under the Green Deal.

By consolidating the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD) and EU Taxonomy, among other initiatives, the EU hopes to reduce compliance issues while addressing concerns over Europe’s economic competitiveness and regulatory complexity.

Reduced complexity and costs, greater flexibility and choice

Although the EU Omnibus reduces the number of companies mandated to report on sustainability, it simplifies the reporting process by:

• Reducing complexity with fewer data points, staff involvement and related costs
• Enhancing flexibility when choosing an assurance partner – no need to pick a financial accounting firm
• Streamlining workflows, report production and flexibility

Some commentators claim it is the death of the CSRD, but this is simply not true. Organizations can benefit from the simplification and cost savings outlined as they continue their sustainability activities and reporting because investors, customers and society will still expect them to act sustainably. Reporting helps highlight a company’s sustainability impacts while enhancing reputation, operations and social capabilities, among other aspects. If companies cease or decrease reporting because it is no longer mandatory, they stand to lose a lot, particularly their market position and trust.

Utilizing our 30-plus years as a sustainability leader, our new IMPACT NOW for sustainability portfolio and experts are ready to partner with you, tailoring services to your exact needs, which is more important than ever. Wherever you are, whatever your size, we provide precise, one-to-one service end to end.

How IMPACT NOW supports continued sustainability reporting

Continued sustainability reporting is essential for:

• Achieving sustainability goals and contributing to sustainable development
• Ensuring compliance and highlighting accountability and credibility
• Benchmarking and improving performance
• Avoiding greenwashing and its costly penalties
• Greater reputation, brand and transparency
• Stimulating investment/funding and access to capital
• Increasing innovation, operational efficiency and risk management
• Attracting and retaining customers
• Enhancing employee morale, engagement and retention, and attracting top talent

IMPACT NOW is more than just a concept. It is our commitment to addressing the triple planetary crisis of climate change, biodiversity loss and pollution and waste.

Investors, clients and society expect organizations to build resilience to climate change and reduce their negative impacts on the environment and people. An ESG strategy and disclosure, aligned with your organization’s purpose, allows you to address these expectations and adapt to changes while reaping the rewards.

Whether you wish to take your first steps, enhance your environmental credentials, tackle serious social issues like forced labor, or comply with new regulations or standards, our international community of ESG experts will find the best solution. From a health check to take those initial steps to extensive verification, disclosure and report assurance to demonstrate your ESG credentials, we are here whatever you need. IMPACT NOW also includes key related services, such as ISCC PLUS and ISO 14001 (environmental management), that support your sustainability and reporting missions.

What next?

Remaining within the due-date thresholds? Nothing much changes

Most large organizations have completed their first CSRD report. The requirements broadly remain the same, except:

• Value chain: limited to organizations subject to the CSRD
• Deadline for the first report: may be delayed for two years
• Reduced number of data points (details to be provided by EFRAG)
• Assurance: limited assurance only

How can SGS help?

• We have been a leader in assurance for decades and can perform a health check or audit service.

No longer subject to the CSRD following the omnibus: two main options

Option one: your organization has already started its reporting process

• No reporting obligation
• SGS advice to finalize the report

How can SGS help?

We can support you in finalizing your report, including assessing all or part of the report.

Option two: your organization has not yet started its reporting process

• No reporting obligation
• SGS advice concerning the Voluntary Sustainability Reporting Standard for Non-Listed SMEs (VSME)

How can SGS help?

We can support you in building your sustainability strategy, action plan and VSME reporting.

Not subject to the CSRD, so no reporting obligation, but…

Despite the EU Omnibus, your organization should continue preparing for the EU’s corporate sustainability requirements to unlock value creation and sustainability transformation across your business.

You should always consider the long-term need to shift to more sustainable methods of economic growth. Robust sustainability disclosure regulations will help you unlock value creation through organizational shifts, such as enhanced sustainability performance management and governance, and investment prioritization within operations or supply chains.

You do not need to be subject to any regulations to:

• Manage your sustainability and ESG strategy
• Manage your risks and opportunities (climate risks and value chain, etc.)
• Build on your achievements (QHSE, ESG actions, etc.) for a concrete and impactful ESG action plan
• Communicate your successes through simple reporting (VSME)

How can SGS help?

We can help you build your sustainability strategy, action plan and VSME reporting.

The EU Omnibus – 10 key changes*

What remains?

* Reference: TIC Council

The CSDDD will also endure significant cuts. Due diligence will be restricted to direct suppliers and organizations with more than 500 employees. Civil liability and due diligence for financial institutions will both be abandoned.

We have supported numerous clients to align with the German Supply Chain Due Diligence Act (LkSG), the forerunner to the CSDDD. As the EU Omnibus is partially aligned with the LkSG, we are equipped to support risk analyzes and managing supply chain environmental and human rights issues.

Continue making an IMPACT NOW

Discover how our CSRD and CSDDD services, part of our IMPACT NOW ESG Assurance portfolio, can support your reporting requirements.