EU omnibus: Risks persist despite regulatory retraction
Even if the EU trims CSRD and CSDDD obligations, investors, supply chains, and regulators will still demand double materiality discipline.
Why the Omnibus review is on the table
The European Commission is weighing an Omnibus adjustment to CSRD and CSDDD as part of its Green Deal stocktake. Business lobbies cite compliance burdens and competitiveness pressure as reasons to ease disclosure rules.
- Regulatory burden: SMEs argue that CSRD reporting strains resources.
- Competitiveness: EU firms fear they will lose ground to U.S. and Chinese peers with lighter ESG requirements.
- Omnibus proposal: Consolidation may simplify reports, but it also risks diluting transparency and investor confidence.
It’s tempting to celebrate a rollback, yet companies that pause ESG discipline face bigger shocks later.
Double materiality remains the strategy anchor
CSRD introduced double materiality—measuring how sustainability affects the business and how the business affects society. Even if rules soften, the underlying risks do not.
- Investor scrutiny: €6.6T in AUM urged Brussels not to weaken rules (Reuters); EY found 88% of investors now use more ESG data.
- Regulatory resilience: EU Taxonomy + SFDR continue to demand consistent, auditable data.
- Operational upside: McKinsey links ESG + financial performance to 2 pp higher TSR (7 pp vs. market) when sustainability is integrated.
Five ways to turn double materiality into value
- Find efficiency wins: Route optimisation like UPS ORION saves 10M gallons of fuel annually, eliminating 100K metric tons CO2e.
- Earn trust: Highly trusted brands outperform up to 400% in market value (HBR); greenwashing rules (EU Green Claims Directive) make evidence mandatory.
- Access capital: €7T of €12T EU AUM uses ESG strategies (MSCI); stronger ESG data improves lending terms (Bain).
- Fortify supply chains: Scope 3 disclosures force upstream/downstream visibility; proactive DMAs surface vendor risks early.
- Convert IROs to ROI: Double materiality clarifies impact/risk/opportunity priorities so ESG programs map directly to financial returns.
Regulations may shift, but sustainability risks remain
Climate exposure, supply chain disruptions, and investor accountability continue irrespective of the Omnibus outcome. Companies that slow ESG work now will pay for it when standards rebound.
Rather than waiting, use double materiality to build resilience, retain trust, and defend valuations.
We simplify double materiality
Drova guides enterprises through double materiality with structured playbooks, data automation, and board-ready reporting. Stay compliant today, stay competitive tomorrow.
Drova maps your stakeholders, issues, and evidence so you can withstand Omnibus debates and investor scrutiny.
