European Commission officials face a call from more than 300 businesses and organisations to retain the “double materiality” principle currently contained in European sustainability reporting.

Double materiality demands that companies report not only on the impact of climate change on their business strategies, but also the impact of business activities on society and the environment.

The call, involving signatories like Ikea, Nokia and  the energy company Vattenfall, among others, comes as the Commission works through the “omnibus” process that will simplify two key pieces of legislation—the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).

The letter  says: “The signories of this statement consider that regulatory simplification can be achieved without compromising on the substance of sustainability rules or their significant benefits for businesses across the EU.”

At the heart of the CSRD is a set of European Sustainability Reporting Standards (ESRS) which have been on an accelerated review timetable since the omnibus process was launched in February.

No other jurisdiction has pushed ahead with the double materiality principle in sustainability reporting in the way Brussels originally intended to impose it on European Companies.

The principle is not even included in sustainability disclosure guidelines published by the International Sustainability Standards Board (ISSB), a set of principles considered a global baseline.

Robin Hodess, chief executive of the Global Reporting Initiative, a body that issues its own reporting guidelines, supports the letter and its message. “The core ambition of the CSRD remains critical, providing the basis for high-quality sustainability reporting that’s built on double materiality.”

She adds: “That’s why we urge policymakers and politicians to heed the call of leading businesses, investors and other organisations, by preserving the ambition of this important legislation and ensuring that the EU does not fall behind in the sustainable economy transition.”

The omnibus has provoked much debate as the Commission works to soften its demands. The project was launched after publication of a report last year from former European Central Bank president Mario Draghi which argued that Europe’s sustainability reporting framework had become a “major source of regulatory burden.”

Much of the debate has centred on which companies are caught by the reporting rules, and how much they should report.

CSRD began life as a mandate affecting companies with 500 employees or more. There have been calls to lift the threshold as high as 3,000 workers.

Many observers worry about the process underlying the omnibus. Writing for Board Agenda, Julia Otten of campaigning law firm Frank Bold, argues: “The absence of evidence-based decision-making is troubling, especially when we don’t know the impacts on high-risk sectors involved.”

The Commission’s move to ease the burden of sustainability reporting comes at a time when climate initiatives and EU reporting rules are under fire in the US.

At the end of last week, 20 US states issued an ultimatum to fund managers to cease using ESG as investment criteria and demanded a pledge they would not use CSRD as a reporting benchmark in their engagement with companies.

One US senator, Bill Hegarty, has accused EU sustainability laws of “ideologically motivated overreach.”

The Commission will likely finish omnibus proposals ready for final negotiation between October and November this year. Only then will campaigners know if they have been heard. However, tensions with the US are only likely to continue.