FEBEA and the Sustainable Banking Coalition (SBC) have jointly authored a position paper, “Getting Simplification Right: A Banking Perspective on the Omnibus Proposal.” The paper welcomes the European Commission’s efforts to streamline sustainability reporting obligations but warns that simplification should not compromise the quality and reliability of ESG data, which is essential for lenders and investors to assess risks, allocate capital efficiently, and support Europe’s green transition.

The paper argues that the current Omnibus proposal risks undermining a robust, risk-based approach to sustainability reporting. By excluding mid-cap companies from reporting requirements and failing to ensure comprehensive value chain disclosure, the proposal could lead to poorer risk assessment, misallocated capital, and ultimately higher costs for banks, consumers, and society as a whole. FEBEA and SBC highlight the importance of keeping mid-cap companies within the reporting scope, enabling risk-based and proportionate value chain reporting, and maintaining the principle of double materiality—assessing both the financial impact on companies and their impact on society and the environment.

FEBEA and SBC call on European co-legislators to ensure that any simplification of reporting requirements preserves transparency and accountability. Our recommendations include supporting credible climate transition plans and embedding double materiality across all EU sustainability reporting standards, including those for SMEs, in a way that is proportionate to company size and capacity. The paper emphasizes that only a balanced and forward-looking framework will allow the financial sector to effectively support Europe’s sustainability goals and maintain its competitive edge on the global stage.