Sustainability Blog #23

Regulatory updates

In November 2024, Ursula von der Leyen announced plans to introduce an 'omnibus' legislative instrument aimed at streamlining administrative procedures and sustainability reporting requirements outlined in the CS3D, CSRD, and the Taxonomy Regulation (referred to as the Omnibus). An omnibus instrument would consolidate multiple bills into a single legislative package, which can be approved through a single vote. It is important to clarify that the proposed sustainability Omnibus will not merge the CSRD, CS3D, and the Taxonomy Regulation into a single law. Instead, it will serve as a unified piece of legislation that introduces changes to each of these frameworks, which will still be interpreted and applied separately. Reports suggest that potential amendments could include adjustments to size thresholds for eligible companies, a reduction in the number of datapoints in the ESRS, and revisions to provisions deemed impractical by industry stakeholders.

Additionally, the European Commission has released a Draft Commission Notice concerning the delegated acts under the EU Taxonomy. This notice aims to provide clarity on specific technical screening criteria related to: (i) economic activities linked to non-climate environmental objectives, as outlined in the Taxonomy Disclosures Delegated Act, (ii) the Do No Significant Harm criteria, (iii) interoperability, and (iv) third-party verification. The FAQs will be finalized and adopted once they are available in all official EU languages.

COP28

November was also marked by COP28 hosted in Baku, Azerbaijan. Among the standout achievements of COP28 was the agreement to phase out unabated fossil fuels, a milestone in global climate policy. This commitment signals a turning point for energy transition strategies, as governments and industries align toward cleaner, renewable energy sources. Additionally, the conference underscored the importance of integrating biodiversity preservation into climate action, recognizing the interdependence of ecosystems and human well-being. Key decisions made at COP28 included the establishment of a Loss and Damage Fund, designed to provide financial support to nations most affected by the adverse impacts of climate change, such as extreme weather events and rising sea levels. Countries also adopted a Global Renewable Energy Target, agreeing to collectively triple renewable energy capacity by 2030 to accelerate the global shift away from fossil fuels. Over 100 nations committed to significantly cutting methane emissions, a major contributor to global warming, by 40% within the next decade. Additionally, enhanced support was announced for vulnerable communities to strengthen climate adaptation measures, including infrastructure projects and early warning systems.