News Releases

As advertised — and anticipated — the European Union presented its “Omnibus” proposals on sustainability reporting and due diligence earlier this week. And, also as advertised and anticipated, the proposed revisions to reporting requirements, scope, rules, penalties and due diligence will significantly streamline sustainability requirements for companies based in the EU. 

So, is this a positive or negative development for sustainable investors? Well, the answer depends on a number of factors and perspectives, according to recent key insights on the proposal developed by the Morningstar Sustainalytics EU regulatory & business involvement product team and its Senior Director Anne Schoemaker. 

• On Taxonomy reporting, Morningstar Sustainalytics welcomes the EU decision to keep the reporting requirements for the largest European companies. While a critical and necessary instrument to help facilitate green and transition investment opportunities, the process can benefit from some streamlining to reduce regulatory burdens.    

• On the corporate sustainability reporting directive, or CSRD, Morningstar Sustainalytics believes that while a reduction in data reporting requirements will be welcomed by companies, too drastic a reduction in scope could lead to a significant reduction in the depth and breadth of data available for sustainable investors.  

• On where we go from here, the regulatory team at Morningstar Sustainalytics points out the omnibus proposal is structured as an EU Directive, meaning it needs to be transposed and implemented by EU Member States. The measures proposed are substantial, the process will be complicated and the timing is still unclear. 

Anne Schoemaker – Senior Director, Regulatory Policy, Morningstar Sustainalytics 

“Like any far reaching and broad-based policy proposal, the EU Omnibus packages on sustainability and investment simplification are well intentioned and multi-faceted. Ultimately, it is our hope that regulators will strike the right balance between encouraging innovation and a competitive market while ensuring investors have access to sustainable market data that is transparent, comprehensive and of high quality. We’re in the first act of a long performance so will continue to watch this process very closely as it evolves.”