EU Platform on Sustainable Finance, a panel of sustainable finance experts advising the European Union, has proposed revisions to the bloc’s green investment classification rules, aiming to reduce the reporting burden on companies by a third. The recommendations come ahead of a broader review of EU sustainability regulations and efforts to streamline green finance rules.
The EU faces pressure from member states, including France, to simplify business regulations, while concerns over competitiveness have grown amid deregulation efforts in the United States. In response, the expert group suggested reducing disclosure requirements for some companies, increasing flexibility in using proxies and estimates, and refining the EU’s taxonomy regulation to ease compliance.
The EU taxonomy is a framework that defines which economic activities can be classified as sustainable. Companies must report on how their investments, lending activities, or business operations align with these criteria. The proposed changes include simplifying compliance with the “Do No Significant Harm” principle, which ensures green investments do not negatively impact other environmental objectives.
According to the EU Platform on Sustainable Finance, which was commissioned by the European Commission to refine the taxonomy, these measures should significantly lighten the reporting load for non-financial firms. While the proposals focus solely on taxonomy rules, banks and investment firms are also expected to benefit, with simplified reporting on green assets and a streamlined process for verifying sustainable investments.
The recommendations are part of a broader effort to encourage green investment while reducing regulatory complexity, as the EU seeks to balance sustainability goals with economic competitiveness.
