ID: 1776
Presenting Author: Johanna Damboeck
Session: 586 - Policy and regulation changes: building public trust in EIA systems
Status: pending
EU Omnibus 2025 eases sustainability reporting but risks transparency, comparability, and trust; careful calibration is needed to prevent greenwashing.
The European Union has positioned itself as a global leader in sustainable finance through the EU Taxonomy, the Sustainable Finance Disclosure Regulation, and the Corporate Sustainability Reporting Directive. These frameworks enhance transparency, comparability, and credibility in sustainability reporting, steering capital toward environmentally sustainable activities. The 2025 Omnibus Package introduces major simplifications—limiting reporting to large companies, adding materiality thresholds, streamlining “Do No Significant Harm” criteria, and removing sector-specific standards. While intended to ease administrative burdens, especially for smaller entities, these changes risk weakening the integrity of the reporting system. By narrowing disclosure requirements, the reforms may erode comparability, reduce transparency, and undermine trust in sustainable finance—at a time when misinformation and public skepticism already challenge institutional legitimacy. This paper assesses the implications of the Omnibus Package 2025 for transparency and accountability in sustainability reporting, emphasizing risks of selective disclosure and greenwashing. Building on a legal-normative analysis, it argues that simplification must be carefully calibrated to preserve credibility. Suggested reforms include differentiated reporting for high-impact sectors, clearer guidance on partial compliance, and mechanisms safeguarding comparability. Ultimately, efficiency must not come at the expense of trust: sustainable finance depends on strong, transparent, and enforceable systems of accountability.
Senior Social Development Specialist in the Latin America and Caribbean department at the World Bank and PhD candidate in environmental law. Experienced across Africa, Latin America, MENA and Europe,