Federation publishes Omnibus I Position Paper urging policymakers to focus reporting requirements on meaningful data points and to adopt CSRD and CS3D 2028 postponement

DOWNLOAD HERE

Brussels, 26 March 2025 – FERMA has today published its Position Paper on the Omnibus Sustainability Rules Simplification Package (Omnibus I), following its introduction by the European Commission. FERMA welcomes the proposed amendments to the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CS3D) to streamline sustainability reporting requirements but urges policymakers to take further actions to ensure companies develop more effective and achievable sustainability practices.

A positive signal

FERMA considers Omnibus I “a positive signal for companies” and states that regulatory simplification which maintains a risk-based approach is key to facilitating action on ESG matters and helping deliver concrete results beneficial to both businesses and society alike.  Further, the Federation notes that reporting requirements should serve as a “compass guiding business towards effective sustainability risk management practices” which it adds are vital to the resilience and competitiveness of the EU economy.

The Position Paper also states that sustainability risk management must be considered a business and governance matter, rather than a compliance requirement. Highlighting the central role of risk managers in contributing to reporting requirements, it states that sustainability risks are not substantially different from other forms of risk and as such should be addressed by adopting an ERM-based approach.

Further measures needed

However, to ensure the effectiveness of reporting requirements, FERMA calls upon EU policymakers to:

• Ensure reporting requirements focus on the data points that are most meaningful to a company’s activities, considering its sector and size.
• Adopt the postponement of the application of the CSRD for companies that were due to report in 2026 and 2027 and of the CS3D to 2028 to clarify the new regulatory requirements and give companies time to adapt their governance and risk processes.
• Provide guidance on how to perform double-materiality Impact Risk and Opportunity (IRO) assessments aligned with the ERM methodology and driven by the risk function.
• Ensure upcoming voluntary reporting standards for companies now out of scope of the CSRD result in effective sustainability risk management practices.
• Focus the due diligence obligations under the CS3D to direct business partners only.
• Provide guidance on what is expected from companies under the CS3D to ensure that businesses acting in good faith and to the best of their ability are not adversely affected, and to help prevent any potential overinterpretation of the directive’s requirements by national supervisory authorities.

Preparing in advance

In addition to releasing the Position Paper, FERMA has urged risk managers to be prepared for reporting requirements under the current versions of the CSRD and CS3D, should the proposed postponement of their application to 2028 be rejected or the scope of the directives changes during the legislative process. Further, it notes that while the Omnibus adoption and transposition process could, conservatively, take more than a year, companies must be ready well in advance of it coming into force.

To prepare for double-materiality assessments and third-party risk assessments in 2027, FERMA also encourages Risk Managers to take responsibility for conducting IRO assessments, while also adapting their ERM frameworks to consider sustainability risks and ensuring that appropriate data collecting and processing tools are in place to facilitate analysis and reporting.

Commenting on the aims of Omnibus I, Valentina Paduano, FERMA Vice President, said: “FERMA welcomes the introduction of the Omnibus I and efforts to streamline sustainability reporting requirements. While the EU needs to keeps its ESG ambitions high, however, it must also apply a more pragmatic approach to ensure that CSRD and CS3D have a meaningful impact at both company and societal level, in turn amplifying the resilience and competitiveness of the EU economy. We believe the proposals made within FERMA’s Position Paper will contribute to this.”