ESG measures passed despite right-wing opposition

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Despite being a climate and sustainability champion, the EU has been struggling to cement these values recently, and witnessed a close call during the passage of its Environmental, Social, and Governance (ESG) reporting regulations.

An attempt to obstruct the adoption of Europe’s ESG reporting rules was narrowly defeated, while a separate proposal to delay their implementation is making progress.

MEPs reject ESG ‘high administrative burden’ argument

The motion was primarily championed by MEPs from the European Parliament’s largest party, the centre-right European People’s Party (EPP).

A coalition of 44 right-wing and liberal MEPs made an effort to block the adoption of new sustainability reporting standards. However, the bid was thwarted by 359 votes in favour to 261 against.

They contended that the ESG reporting standards would impose a high administrative burden on companies, contravening the EU’s objective of reducing reporting requirements and bureaucratic red tape. The European Commission had already diluted the proposal as produced by the EU accounting advisory body EFRAG.

This was regardless the final approval of the European Sustainability Reporting Standards (ESRS), according to which some 50,000 firms must start gathering ESG data by 2024.

EPP MEPs lobby against green directive

However, a separate EU law, the corporate sustainability due diligence directive (CSDDD), is meanwhile encountering opposition from the EPP. Moreover, EPP MEPs this week succeeded in securing a two-year postponement to CSDDD for some sector-specific reports and reporting obligations for non-EU companies.

This proposal was introduced as part of the EU’s 2024 Work Program. While conservative interests in several European nations are pushing back against these developments, the majority of the European reporting framework is proceeding as originally planned.