BrazilOmnibus to help EU companies weigh the strategic value of ESG and CSRD journeys
Changes to European Union sustainability regulations, including the Omnibus Simplification Package, are altering the landscape for environmental, social, and governance (ESG) efforts. A new whitepaper from RSM examines the impact of these changes and how companies can seize the moment to develop more effective ESG strategies and reporting systems.
The Omnibus package is one of a set of proposals from the European Commission that seek to cut red tape and make EU rules simpler. The new set of measures aims to meet the recommendations made in the Draghi report, which urged Europe to boost competitiveness vis a vis other parts of the world.
There are several components of the Omnibus package that make various changes to the sustainability reporting obligations under the EU’s CSRD as well as to the CSDDD, CBAM, and the Taxonomy Regulation. These are a complicated set of financial regulations that cover businesses and individuals.
The main point of the Omnibus is to make sustainability reporting more accessible and efficient, simplify due diligence, and create more opportunities in European investment programs, among other aims.
The whitepaper from RSM, a global accounting and consulting firm, emphasizes that these Omnibus revisions do not mean that ESG initiatives should be thrown out the window. On the contrary, now is the time for companies to reassess how they can leverage sustainability to drive innovation and create more value, with Omnibus making that journey easier and more feasible.
The landscape for corporate responsibility is now changing, that much is clear. But it is not diminishing. The CSRD is only one dimension of ESG – and one that has often been criticized as too strict, too complex, and often led to confusion among business leaders.
The problem with the CSRD is that in attempting to comply with these rules, companies often devote an outsized amount of resources to the actual process of reporting, instead of focusing on deeper processes of achieving sustainability. Working towards ESG goals looks different for different companies, depending on a wide array of factors.
In addition to that, many companies subject to the CSRD were not adequately prepared for its initial deadlines and a significant number of auditors across Europe were reportedly not yet ready to provide the required ESG assurance.
With the CSRD now delayed by two years for most companies, they have an opportunity to move beyond a purely compliance-driven approach and pursue ESG opportunities more strategically. These opportunities can include fostering innovation, improving cost efficiency, allowing companies to differentiate themselves in the market.
Being prepared
A first step for EU companies is according to RSM to conduct an ESG maturity assessment, in which they identify gaps and opportunities, assess risks, begin strategic planning, and improve stakeholder engagement. A well-executed assessment is crucial in building an aligned ESG strategy and robust roadmap.
Next, companies should understand their specific ESG profile, determined by a number of factors like company size and location. They should then adopt agile tools and frameworks that allow them to build a scalable ESG reporting infrastructure.
Conclusion
The bottom line, RSM highlights in its report, is that the Omnibus should not be viewed as an end to ESG efforts but as a chance to reimagine and strategically integrate sustainability into core business operations, balancing regulatory considerations with the creation of long-term value. Ultimately, companies that embed sustainability within their strategies and operations become more future-proof and gain a competitive edge.
