1.- How many separate directives does the European Commission’s Omnibus Proposal comprise?
The Omnibus Proposal is structured into two separate directives.
2.- What is the main focus of the first directive under the Omnibus Proposal?
The first directive, commonly referred to as the “stop-the-clock” proposal, focuses on setting the application dates for Member States’ implementation of the requirements.
3.- What key change is proposed regarding the ESRS to reduce mandatory data points?
The proposal suggests removing the obligation to adopt sector-specific standards and introducing revised ESRS through a delegated act, aiming to reduce mandatory reporting points.
- Note 1: ESRS (European Sustainability Reporting Standards) are standards developed by the EU for corporate sustainability reporting under the CSRD.
- Note 2: A Delegated Act is a non-essential legislative act adopted by the European Commission pursuant to powers delegated by the European Parliament and the Council, to supplement or amend certain non-essential elements of a legislative act.
4.- Does the Omnibus Proposal eliminate the double materiality assessment under the CSRD?
No, the double materiality assessment remains a requirement under the CSRD, despite speculation about its possible abolition.
- Note 1: The Corporate Sustainability Reporting Directive (CSRD) is an EU directive that sets out non-financial and sustainability reporting obligations for companies.
- Note 2: Double Materiality refers to the CSRD concept requiring companies to report both on how sustainability issues affect the company (financial materiality) and how the company’s activities impact people and the environment (impact materiality).
5.- What areas are included in the scope of mandatory harmonisation under the proposed CSDDD revisions?
Mandatory harmonisation is extended to cover group-level support for due diligence, integration into policies and risk management systems, impact identification and assessment, prevention of potential adverse impacts, remediation of actual impacts, and grievance and complaint mechanisms.
- Note 1: The Corporate Sustainability Due Diligence Directive (CSDDD) is an EU directive imposing due diligence obligations on companies to identify, prevent, mitigate and end adverse impacts on human rights and the environment in their own operations and value chains.
- Note 2: Due Diligence is the process companies must undertake to identify, prevent, mitigate and account for actual and potential adverse impacts of their operations on human rights and the environment.
6.- How are burdens on SMEs and small mid-cap companies alleviated under the CSDDD revisions?
The volume of information that large companies may request from SMEs and small mid-caps for value chain mapping is restricted.
7.- Is the requirement to terminate a business relationship removed under the CSDDD revisions?
Yes, the requirement to terminate a business relationship is removed, provided there is a reasonable expectation that an enhanced prevention action plan will succeed. Continuing the relationship under these conditions does not trigger liability.
- Note: Business Partners are entities with which a company has a direct or indirect commercial relationship within its chain of activities.
8.- Which stakeholder groups are excluded from the scope under the CSDDD revisions?
Consumers, associations and partners, employees of the company’s business partners and their representatives, national human rights and environmental institutions, and civil society organisations focused on environmental protection are excluded.
9.- What key change is proposed regarding companies’ obligations on climate transition plans?
The obligation to implement a climate transition plan is removed; companies are still required to adopt such a plan, but are not obliged to take action to ensure alignment with climate goals.
- Note: A Climate Transition Plan is a plan that companies must adopt to ensure that their business model and strategy are compatible with the transition to a sustainable economy and climate targets (e.g. limiting global warming to 1.5°C).
10.- What is the new implementation deadline for the largest companies under the revised CSDDD?
The new implementation deadline for the largest companies is extended by one year, to 26 July 2028.
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