Corporates can “take comfort” from recently announced reforms to EU non-financial reporting rules that aim to boost competitiveness in Europe, according to a leading lawyer.

Speaking on an episode of Board Agenda’s Governance Watch podcast surveying the corporate year ahead, Di Yu, a partner in the White & Case global M&A and corporate practice, says the EU’s new “omnibus” legislation simplifies elements of sustainability reporting and due diligence reforms.

“Having this package now and having the EU take this step can be source of comfort …both stateside and also within the EU and UK.

“The reporting obligations were going to be significant and there were going to be significant costs associated with that.

“Now is an opportunity for companies to actually take another look and figure out: are they within the scope of the rules? If so, exactly what reporting requirements are required?”

She added that the reforms were a “package of changes which are intended to promote competitiveness, reduce administrative burden for companies and just give people a little bit more time to figure out exactly what it is they need to do”.

Climate transition

The changes involved amendments to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) and come after a fierce debate inside Europe over how business will support climate transition and continue to be more competitive at a time of geopolitical uncertainty.

The omnibus measures will delay implementation of both the CSRD and CSDDD and potentially reduce the number of companies that fall within scope by 80%.

Other issues raised on the podcast included development in executive pay and proxy advice.

This year will see the first full year of new guidelines on pay from the Investment Association which, though not mandatory, potentially make it easier for listed companies to hike executive rewards.

Lachlan Low, counsel in White & Case’s M&A and corporate practice, says: “It’s very much the benchmark and it will be interesting to see how it plays out this year…when rem’ policies are up for renewal, and to see if companies actually do take advantage of the flexibility that is offered.”

To listen to the full podcast click here