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EU's New 'Omnibus' - Simplification or Rollback?

Is the EU’s “Omnibus” a simplification of sustainability regulations or actually just deregulation?
The UN Global Plastics Treaty breaks down, adding another disappointment for the sustainability movement.
Coca-Cola joins companies that are recalibrating their sustainability goals.
How do Trump's tariffs and cabinet picks impact climate action?
A series of precedent-setting climate court cases kicked off this week.
Companies racing to meet the EU’s Corporate Sustainability Reporting Directive (CSRD) requirements are now facing an added layer of complexity as the rule is set to be re-opened and potentially changed. Less than a month before reporting begins, EU ministers, in a simplification drive, have decided to create a new omnibus regulation combining CSRD with two other sustainability rules.
The new “simplified omnibus regulation” will combine the CSRD with the EU taxonomy – a regulation categorizing “green businesses” and the Corporate Sustainability Due Diligence Directive (CSDDD) – a regulation requiring companies to identify and mitigate environmental and social harm in supply chains. This change was prompted by key EU figures asking for less burdensome sustainability regulation.
While there are more questions than answers at this point, published reports claim that the new regulation will be issued on February 26th, 2025, less than three months from now. We also know that this action will re-open the legislative process on these three key policies, which were considered completed.
Reopening these rules will likely lead to attempts to scale back some or all of these regulations. Marie Toussaint, a French Green MEP said, “Although they say simplification will not mean deregulation, I’m really afraid that that’s exactly what’s on the table.”
As pointed out in this piece by Andreas Rasche, the timing of this couldn’t be worse. There are still member states that have yet to transpose the CSRD and may hold off until after the omnibus goes through the legislative process. Plus, all of this leads to further uncertainty, with thousands of companies preparing to issue their first CSRD reports.
With confusion swirling and the pendulum swinging to deregulation, the EU confirmed the Deforestation Rule (EUDR), which has gone through multiple changes in the last few months, has been finalized (well, almost, it still has a few more votes). An expected year delay until December 31st, 2025, was maintained. However, unexpectedly, a controversial measure to exempt ‘no risk’ countries was dropped.
Life in Plastic It’s Not Fantastic
This week’s fifth round of UN talks on reducing plastic pollution in Busan, South Korea, failed to yield the desired result. The UN’s Plastic Treaty was touted as “the most important multilateral treaty” since the Paris Agreement. Even though 100 countries agreed to a reduction in the production of plastics and more than 140 agreed to reduce certain chemicals that harm human and environmental health, a small minority of oil and gas states led by Saudi Arabia and Russia opposed these targets.
John Duncan of The Business Coalition for a Global Plastics Treaty said, “It’s frustrating to watch the slow pace of multilateralism, which can be dictated by this very unprogressive minority.” The stalemate comes down to two opposing viewpoints. Most countries believe that production should be reduced, whereas oil-producing nations believe that the treaty should only discuss plastic waste management.
This is the third UN multilateral event with a poor outcome in as many months. Talks at the biodiversity COP in October were suspended and will reconvene next year. Although there was an agreement on financing at COP29 last month, many were unhappy about the result, and other important agreements were kicked down the road.
The imminent arrival of the Trump Administration means a likely US withdrawal from the Paris Agreement. However, Trump supported action on reducing ocean plastics in his first term and will likely get on board with a global plastic treaty that emphasizes waste management over reduced production. Ben Dietderich, a Republican spokesperson, said Trump “will tackle the issue of plastic waste and will result in a treaty that the Senate can support.”
More Corporate Backtracking
Shortly after the collapse of the plastic agreement, Coca-Cola came under fire for backtracking on its plastic reduction targets. The company said this week they will aim for 35-40% recycled material in packaging by 2035, as opposed to a previous goal of 50% by 2030. Coke also aims to collect 70-75% of every can and bottle sold by 2035 as opposed to collecting and recycling a bottle or can for every one sold by 2030.
Coca-Cola is one of a growing number of companies that are recalibrating their sustainability goals. Expect more of this in 2025, as cost pressures mount and the threat of greenwashing accusations makes companies more realistic with their sustainability targets.
Climate Impacts of Trump’s Tariffs and Nominees
Donald Trump will take over as president in just over a month. His tariff plans have come under fire, as they will hike the prices of EVs, batteries, and other critical components of the energy transition, slowing the shift to a low-carbon economy.
Although the general direction of Trump’s administration is clear, the team he has built so far runs the whole spectrum of views on climate. On one end, Robert F. Kennedy Jr., his Health and Human Services Department nominee, says it is an “existential” risk. On the other end, Chris Wright, Energy Department nominee, denies climate change is a problem.
Climate in the Courtroom
In the biggest climate court case of the year, The International Court of Justice began proceedings this week on a case that could determine countries' obligations to fight climate change and whether polluters can be sued for not taking action. This is the first time the ICJ (the UN’s highest court) has heard a climate case and will hear arguments from more than 100 nations and international groups, including low-lying nations. Perhaps unsurprisingly, the US is arguing against countries being legally forced to act on climate change.
Hearings will be held over the next two weeks at the ICJ ahead of an expected decision next summer. In addition to this international climate case, there were three other notable cases this week:
Surprisingly, two cases are Republican states suing oil and gas companies for environmental damages. The first is a county in Kansas suing Exxon and other major oil and gas companies, alleging false claims over the recyclability of plastics. The other is from the mayor of Carrboro, a small town in North Carolina, who sued Duke Energy for continuing to use fossil fuels while knowing they were contributing to climate change.
The other case was Texas and ten other Republican states suing BlackRock, Vanguard, and State Street for allegedly using ESG investing to manipulate energy markets. The lawsuit is the most recent anti-ESG move from Texas. It claims that these asset managers use climate-focused investments to drive down coal use and increase energy prices. BlackRock says the claims are “baseless.”
The views expressed on this website/weblog are mine alone and do not necessarily reflect the views of my employer.
Other Notable News:
Sustainability Research
New research from Morgan Stanley reveals that 80% of investors will increase sustainable investments over the next two years.
New KPMG research found that 95% of the world’s top 250 companies are now publishing carbon reduction targets.
A new report reveals that China’s emissions will likely peak next year. To develop this optimistic update, the research looked at China’s huge clean energy and EV boom and the reduction in new buildings.
AI and Climate
Climate Investments
Global Weirding
The world’s largest inland body of water, the Caspian Sea, is expected to reach a record low in the coming weeks. The lake is expected to shrink substantially until the end of the century.
Notable Podcasts:
As a founder and former Chairman of the Responsible Business Alliance (RBA), I was honored to speak at the event celebrating RBA’s 20-year anniversary. You can watch the origin story video here.
In this week’s edition of the Outrage and Optimism podcast, host Paul Dickinson, Christina Figueres, and Tom Rivett-Carnac summarize their conclusions from COP29. They conclude that while an agreement was reached, the gap between what was agreed upon and what is needed to address climate change remains wide.
In the most recent episode of the Harvard Business Review's The Climate Rising podcast, they discuss a positive use of AI in climate adaptation. They are joined by Carsten Brinkschulte, the CEO of Dryad, a company that uses AI for the early detection of wildfires. Carsten describes how Dryad’s early detection system can save lives and costs by giving customers real-time wildfire updates.
Notable Jobs:
Principal, Decarbonization, American Airlines, Dallas, Texas
Principal, Sustainability Reporting, American Airlines, Dallas, Texas
Reporting Fellow, Climate, Crooked Media, Los Angeles, California
IBM Corporate Social Responsibility, ESG Strategy & Programs Team 2025, IBM, Raleigh, North Carolina
Climate Analyst, Loomis, Sayles & Company, Boston, Mass, Hybrid
Associate, Sustainability Risk Management, BCG, New York, Hybrid
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