PensionsEurope has welcomed the provisional political agreement on the EU’s Omnibus I simplification package, but warned that efforts to streamline sustainability reporting and due diligence must not come at the expense of transparency and decision-useful data for long-term investors.

The Omnibus I agreement was reached this week between the European Parliament and EU member states as part of efforts to simplify EU sustainability reporting and due diligence rules.

The package includes amendments to the Corporate Sustainability Reporting Directive (CRSD) and the Corporate Sustainability Due Diligence Directive (CSDDD), aimed at reducing administrative burden while preserving the objectives of existing legislation.

“Simplification is welcome, but transparency cannot be sacrificed,” PensionsEurope CEO, Matti Leppälä, stated.

“Pension funds need reliable and comparable sustainability data to manage risks and support the sustainable transition. Omnibus I must protect key investment-relevant information so long-term investors can make informed decisions,” he added.

On the CSRD, PensionsEurope welcomed proportionality but cautioned that higher thresholds for reporting companies risk shrinking the ESG data universe.
Therefore, it said “genuine simplification” should focus on eliminating duplicative and immaterial data, rather than reducing the number of companies in scope.

The association also warned that, while a proportionate approach to the European Sustainability Reporting Standards (ESRS) is supported, key investment-relevant data points must be preserved.

These include Scope 3 emissions and principal adverse impact indicators, which are necessary for compliance with the Sustainable Finance Disclosure Regulation (SFDR) and for informed long-term investment decisions.

PensionsEurope further warned that weakening or removing limited assurance could “undermine confidence” in sustainability reporting, stressing that robust assurance at the source is essential to maintain high-quality, reliable information across the investment chain.

On the CSDDD, the association supports further harmonisation and welcomed proportionality measures, including a risk-based approach and reduced information pressure on small and medium-sized enterprises.

However, it warned that removing the civil liability regime could lead to divergent national rules, reducing legal certainty for cross-border investors.

PensionsEurope also said the outcomes of Omnibus I must be fully integrated into the upcoming review of the SFDR to avoid inconsistencies between corporate reporting and financial sector disclosures.

Overall, it stressed that Omnibus I should make reporting smarter, not weaker. Streamlining is welcome, but decision-useful information must be safeguarded to enable long-term investors to do their job effectively, it said.

The provisional agreement reached in trilogue discussions now awaits formal approval from the European Parliament and the Council, after which the amendments will be published in the EU’s Official Journal and enter into force.

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