More than 150 financial institutions have signed a letter urging the EU to rethink a plan to overhaul the bloc’s sustainability reporting and due diligence rules.

Pension schemes KLP, Ircantec and Brunel Pension Partnership joined asset managers including Storebrand, Pictet Asset Management, AXA Investment Management and Nordea Asset Management to warn against a “wholesale revision” of the laws.

This month, the European Commission is expected to table a legislative proposal to amend the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CS3D) and the Taxonomy Regulation, to make them more business-friendly.

While the stated intention is to simplify the three laws by reducing overlaps and inefficiencies, lobby groups and political parties have started campaigning for the so-called ‘omnibus package’ to include more profound changes, such as reductions to the scope and ambition of the rules, and delays to their implementation.

The 162 investors, along with nearly 50 banks, service providers and membership bodies, expressed concern that the current plan to re-open the foundational legal texts underpinning CS3D, CSRD and the Taxonomy, known as Level One, will open the floodgates for interventions that will undermine the core objectives of the laws.

“The EU Taxonomy, CSRD and the CS3D are fundamental cornerstones of the EU’s sustainability policy architecture,” they said.

“Together, they help investors to manage risks, identify opportunities, and ultimately reorient capital towards a more competitive, equitable, and prosperous net-zero economy.”

Changes to the ambition, scope and timing of the laws could make it harder for investors to source the data they need to comply with other European Union requirements, such as the Sustainable Finance Disclosure Regulation and MIFID II, the group pointed out.

While the signatories support interventions to make the EU’s sustainable finance framework more coherent, they said the necessary changes could be introduced at Level Two, where the technical details of the laws are codified, and Level Three, through additional guidance.

This approach would avoid putting the underlying legal texts back on the political negotiating table at a time when anti-sustainability sentiment is growing in parts of Europe.

Specifically, the statement calls on the Commission to streamline the requirements to make them less costly and more workable, guided by a thorough assessment and feedback from practitioners.

It asked for more “user-friendly” guidance for companies who have to comply with the rules, as well as greater interoperability between the EU’s standards and global equivalents.

Other investors that signed the statement include Robeco, Mirova, AkademikerPension, PKA and Sycomore.

Overseas pension funds like the New Zealand Superannuation Fund, Caisse de dépôt et placement du Québec and Canada’s University Pension Plan (UPP) also threw their weight behind the requests.

The statement was coordinated by the Principles for Responsible Investment (PRI), the Institutional Investor Group on Climate Change (IIGCC) and Eurosif.

It was sent to Commission president Ursula von der Leyen and key commissioners responsible for the omnibus package.

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