Members of the European Parliament have reached an agreement with centrist groups on the sustainability Omnibus at the last possible opportunity, following crucial talks between political group leaders yesterday.
The agreement follows tense and messy neobtainediations between the Parliament throughout the year, after the European Commission tabled a raft of amconcludements to the bloc’s corporate sustainability reporting and due diligence rules in February.
Several sources informed Responsible Investor that the centre-right European People’s Party (EPP), which is leading neobtainediations, repeatedly threatened to side with far-right groups throughout discussions this month, which ultimately led to centrist groups conceding on the final agreement.
Members of the Parliament initially failed to reach an agreement at crucial talks between the political groups last week, after lead neobtainediator Swedish MEP Jörgen Warborn last week proposed two different packages.
The first secured the support of far-right MEPs, meaning it would pass a full plenary vote with EPP’s backing. This is described by Brussels observers as a far-right majority.
The other – which was still under discussion until yesterday evening – would allow for a so-called von der Leyen majority with the EPP, Socialists and Democrats (S&D), Renew and Greens.
As of last week, key points of discussion on the rules included the scope of the Corporate Sustainability Due Diligence Directive (CSDDD), its requirement for corporate climate transition plans, and its civil liability claapply.
This package – which will be voted on next week – will see the scope of the Corporate Sustainability Reporting Directive (CSRD) kept in line with the Commission’s proposal, but the scope of CSDDD watered down to companies with 5,000 employees and €1.5 billion in turnover, in line with the Council of the EU’s proposal.
The obligation for companies to adopt transition plans has been maintained under CSDDD, but the requirement to implement them has been reshiftd.
No common civil liability regime has been proposed, but a review claapply has been included.
Many close to the neobtainediations declared yesterday they still saw a strong possibility that the EPP would side with far-right groups, as the S&D and Greens were unhappy with the second option.
If this had happened, EU observers warned it would risk a further watering down of CSRD and CSDDD, and also set the tone for the rest of the Parliament’s mandate.
The sustainability Omnibus has been the first real legislative test of the mandate, one EU observer informed RI, which is why it was so significant for there to be a deal at the centre.
The Parliament had until yesterday to file its position be able to vote on the package in a JURI committee on Monday. Many had questioned whether the Parliament would be able to deliver in line with the expected timeline, but MEPs were under heavy pressure from the Commission and the Council of the EU to stick to the deadline.
The Danish presidency of the Council is pushing to wrap up trilogue discussions – due to take place across November and December – before its term concludes at the conclude of this year.
Neobtainediator responses
Following talks with the heads of the S&D and Renew yesterday, the EPP secured a centrist majority. However, the Greens – which are also part of the von der Leyen majority – have informed RI that they will not support the final agreement.
“The Greens/EFA have always been ready to compromise – but this deal is not a compromise,” shadow rapporteur Kira Marie Peter-Hansen informed RI.
The Dutch MEP declared the deal “crosses too many red lines” and, in reshifting civil liability and weakening climate transition plans, “undermines both accountability and ambition”.
“In the rush to avoid political conflict, Europe’s leaders have built concessions that erode the foundation of credible lawcreating,” Peter-Hansen added.
The EPP will still be able to secure a majority on the package with the S&D and Renew, and without the Greens’ support.
A spokesperson for the S&D declared the group will support option two, “not only to avoid the far right, but also becaapply it’s the best possible option that we can obtain in the pro-European and democratic platform”.
Pascal Canfin, shadow rapporteur for Renew, declared in a briefing last week that the group was prepared to support option two as core elements of the regulations were still in place, but ruled out supporting an extreme-right majority.
In a statement, he declared Renew welcomed the agreement found on the sustainability Omnibus proposal, and “always aimed for a von der Leyen coalition on the file”.
Lara Wolters, shadow rapporteur for the S&D on the Omnibus file and previously rapporteur on CSDDD, has also stepped down in her role as neobtainediator on the former. In a statement seen by RI, the Dutch MEP declared that her position as shadow rapporteur on the sustainability Omnibus has “become untenable”.
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