Politics is full of double-speak. We are not occupying that country, we are “enabling its transition towards peace and democracy”. We are not selling off profitable assets to the private sector, we are “increasing individual choice and personal freedom”.

The latest doublespeak from the European Commission is the campaign to “simplify” rules and regulations. Nobody can argue against making something simpler. What could be nicer and more helpful than making complicated regulations easier for everyone?

In January, European Commission president Ursula von der Leyen promised “an unprecedented simplification effort”. In particular, she targeted key parts of the EU’s Green Deal, which will undergo “a far-reaching simplification” of the rules that require companies to be transparent about their sustainability work. (In Brussels jargon, that’s the CSRD, CS3D, CBAM and the EU Taxonomy, she said.)

Could those laws be weakened as a result? No, no, no! Of course not! The aim “is not to deregulate, but to simplify”, the Commission’s vice-president Teresa Ribera assured the Financial Times.

The truth is out

The publication this week of the so-called “Omnibus” package of proposals “to simplify EU rules and boost competitiveness” revealed the truth – this is about deregulation, pure and simple.

Officials are reluctant to admit it, but Elon Musk’s chainsaw has come to Brussels too. At least Musk is honest and open about what he is doing.

The Omnibus reveals that talk of simplification is a smokescreen for weakening – or abandoning altogether – existing rules on sustainability, and particularly those that promise to generate information essential for measuring progress, incentivising companies and punishing non-compliance.

These proposals will therefore allow major parts of EU businesses to carry on polluting the planet. Here are the facts:

• 80% of companies will no longer be obliged to report how their activities impact sustainability
• The other 20% won’t have to do so for another two years
• 85% of companies will no longer have to report under the EU Taxonomy (which determines which economic activities can be considered green)
• The “do no significant harm” principle has been essentially removed for industrial pollution, so that supposedly sustainable investments can contribute to pollution
• The Commission will no longer enforce what is left of the sustainability rules, leaving it to national governments in EU member states.

Two contradictions

“Simplification promised, simplification delivered!” von de Leyen said. It is ironic that, to deliver all this simplifying, the Commission needed two directives and one regulation, opened a consultation on one delegated act, published two staff working documents, and pledged to revise reporting standards – amounting to more than 150 pages of complexity.

Moreover, these proposals contradict the Clean Industrial Deal, published earlier the same day, which states that mobilising private investment “requires long-term regulatory stability”. Instead, the Commission is changing the regulations and therefore destabilising the investment environment.

Staring into a black box

“Currently we have only 10% transparency on the use of hazardous chemicals in the EU. Green Deal laws such as CSRD and CS3D would give us significantly more clarity on who is producing and using toxic substances and in what quantities – without it, we are staring into a black box,” says Sonja Haider, head of sustainable finance at ChemSec.

“The CSRD reporting requirements are due to come into force this year, so companies have already invested a lot of effort into sustainability reporting and due diligence. Scrapping this would be an enormous waste, while effectively penalising those companies who see sustainability as a competitive advantage. Finally, investors themselves need this data to evaluate financial risks.”

The cost of sustainability reporting is being wildly exaggerated

In February more than 200 financial sector actors, including 162 asset owners and asset managers with a combined €6.6 trillion assets under management, signed a joint statement calling on the EU Commission to “preserve the integrity and ambition” of the EU’s sustainable finance framework.

The cost of sustainability reporting is being wildly exaggerated, while doing away with it makes no economic sense, analysts say. There would also be a supreme irony in the EU scrapping or postponing the CSRD just as China is set to introduce its own strict sustainability reporting standards.

If these proposals are voted into law, the EU will destroy the knowledge base of its project for clean and sustainable economic growth – to use the language of Elon Musk, they will feed it into the woodchipper. This would be a huge setback for the control of toxic chemicals in the EU – you can only manage what you measure – and a tragedy for safeguarding ecosystems and the health of every EU citizen.