In a dramatic moment during Norway’s annual chess tournament this month, chess superstar Magnus Carlsen slammed his fist on the table after he threw away a winning position.

In the economic chess game between Europe and China, the so-called Omnibus of proposals to “simplify” corporate sustainability reporting – revealed in February – is a big move. Here are three reasons why Brussels will regret it.

1. China has its own, better CSRD

💥 China is adopting corporate sustainability reporting standards very similar to those that Brussels seeks to weaken.

In November, Beijing published its Corporate Sustainability Disclosure Standards. Clearly modelled on the EU’s Corporate Sustainability Reporting Directive (CSRD), the aim of these rules is to bring the sustainability reports of companies in China into line with global standards. 

By applying the Chinese rules, companies can enhance their reputation, gain access to sustainable investment, and drive innovation, noted auditors Rödl & Partner. But this sounds like a precise summary of the rationale for the CSRD.

“This short Chinese document uses very clear language, it is much simpler than the thousands of pages of regulations in Europe,” says Sonia Haider, Head of Sustainable Finance at ChemSec.

“It says sustainability reporting needs to be understandable to the layperson, comprehensive, and comparable with other enterprises – all of which are improvements on the CSRD. And all companies are obliged to comply.”

This Chinese document uses very clear language, it is much simpler

Sonja Haider

2. Industry, investors prefer the status quo

💥 Since February, it has emerged that European industry itself does not want to water down sustainability reporting.

• Most large German companies say sustainability rules favour EU manufacturers, while environmental due diligence is the least of their worries, according to a major survey.
• Several major business organisations and investors called for Brussels to keep mandatory sustainability reporting for all companies with more than 250 employees, describing the proposed changes as “totally counterproductive”.
• More than 200 financial actors with a combined €6.6 trillion in assets under management called on the EU Commission to “preserve the integrity and ambition” of the EU’s sustainable finance framework.
• The EU’s own Committee on Employment and Social Affairs rejected the proposed changes to the CSRD.

3. Politicians and lobbyists are out of tune

💥 Major corporations are greener than their industry lobby groups and national governments.

The Financial Times reported new research showing big business in Europe has become significantly more supportive of green policies, while their industry lobby groups have proved much less so.

“The EU’s leaders have been at pains to stress their keen attention to the voice of business,” the paper commented. “But which voices are they hearing – and do they actually represent the priorities of European companies?”

As we saw above, the attitude of many German businesses clashes with that of German chancellor Friedrich Merz, who has been a leading voice supporting the Omnibus.

“Lobbyists and politicians are more extreme than industry itself,” Sonja Haider says. “This ideological opposition to regulation, rather than a rational attempt to simplify and streamline.”

Do they actually represent the priorities of European companies?

Financial Times

Why throw away the advantage?

If the EU weakens its commitment to sustainability reporting, it will fall behind in the global shift toward responsible business.

Countries like China are actively advancing their own green corporate standards. Europe has built a robust sustainability framework, and thousands of companies have already made major investments to align with reporting requirements.

Watering down these efforts risks wasting that progress and will hand a leadership advantage to competitors.

“The EU still has the opportunity to lead. By staying the course on sustainability reporting, we can provide clarity for businesses, drive innovation, and shape global standards – rather than react to them,” Sonja Haider says.