Germany and France have called for a “1 in 1 out” approach to corporate sustainability reporting rules as a further measure in the “omnibus” process currently underway to simplify disclosures for companies operating in the EU.

The call follows a meeting of ministers from the two leading states at the end of August and faces criticism that it strikes a tone suggesting sustainability reporting is a “competitive disadvantage”.

A statement following the summit says French and German leaders want to see the omnibus process accelerated and “restraint” on new reporting rules.

“In addition to ambitiously reducing existing reporting obligations,” the statement says, “limit new obligations by introducing a ‘1 for 1’ rule on information transmissions obligations based on the principle that any new obligation to declare, report or transmit information at European level should accompanied by an equivalent cost reduction.”

The meeting of ministers was not part of the formal omnibus process but will lever extra pressure on EU officials currently trying to ease the regulatory burden of sustainability reporting rules on companies .

The statement met with some criticism. Andreas Rasche, a business professor at Copenhagen Business School, posted on LinkedIn: “The direction is clear: both [Germany and France] will push heavily for further sustainability ‘simplifications’ (eg through the new environment omnibus that is planned for the Fall).

“But, declaring sustainability regulations a competitive disadvantage may appease populist and revisionist sentiments. But it is not a winning strategy for Europe’s future.”

The omnibus process, launched in February, followed a report on European competitiveness from Mario Draghi, former European Central Bank president, which said the EU’s framework for sustainability reporting amounted to a problem.

“The EU’s sustainability reporting and due diligence framework is a major source of regulatory burden magnified by a lack of guidance to facilitate the application of complex rules and to clarify the interaction between various pieces of legislation.”

Part of the omnibus process was to review the European Sustainability Reporting Standards (ESRS) developed for inclusion in the Corporate Sustainability Reporting Directive (CSRD).

At the end of July a new set of standards were issued for consultation reducing the number of data points required in reports by around two thirds.

EFRAG, the body developing the revised ESRS, said it had cut mandatory datapoints by 57% and, with a cut in voluntary datapoints, the overall reduction in disclosed content would be 68%.

“Following extensive feedback from companies already reporting under CSRD, as well s those those preparing to do so, EFRAG focused on cutting complexity and improving usability,” a statement said.

Datapoints are not the only adjustment. EFRAG also wants to “streamline” the double materiality assessment included in ESRS, making it easier for companies to assess their impact on key societal factors like the environment and people.

The omnibus also includes other major proposals including a reduced scope for CSRD. Initially it was planned to apply to companies with 250 employees, but proposals are focused on companies with 1,000 workers. European Parliament figures have argued the threshold should be as much 3,000.

Consultation on ESRS runs until 29 September. While the EU is anxious to deliver a streamlined reporting framework by the end of the year, there is much still to settle. The question is whether the process will deliver reduced regulation while delivering on the EU’s green agenda.