The European Commission on Wednesday proposed to substantially loosen the requirements on companies to report on the social and environmental impacts of their operations.
The proposal would limit the rules to companies with more than 1,000 employees and revenue over 50 million euros ($53 million), which means that about 80 percent of companies currently covered by the directive will now be exempt.
The Commission is trying to simplify regulations that businesses say impede investment and growth. European officials have become increasingly concerned about waning economic competitiveness, particularly when compared with the United States and China. These worries have been exacerbated since President Trump’s return to the White House.
Mr. Trump’s push to relax the rules on companies has widened the regulatory gap with Europe. E.U. commissioners also said changes were needed to strengthen the region’s economy, which has been sluggish.
“The world is changing in front of our eyes,” said Valdis Dombrovskis, the European commissioner for the economy, citing U.S. opposition to a United Nations resolution condemning Russian aggression in Ukraine.
Building a more competitive economy and cutting red tape was an important part of navigating this “complex” environment, he said. “We cannot hope or expect to successfully compete in a perilous world with one hand tied behind our backs,” he added.
On the reporting rules, known as the Corporate Sustainability Reporting Directive, the Commission has also proposed a two-year delay for companies that would have been required to report this year and next. The commission said these changes, and related measures, would save companies about €6 billion per year in administrative work.
The changes need to be approved by the European Parliament before taking effect.
The European Union has been at the vanguard of designing and putting in place rules on climate change and corporate sustainability, but on Wednesday commissioners said those efforts had gone too far.
The “intensive” period of regulatory activity in the past five years, Mr. Dombrovskis said, “has come as a cost, generating a large regulatory burden on people and businesses.”
President Emmanuel Macron of France has been a key supporter of loosening the rules on companies, arguing last month that Europe needed to take a “massive regulatory break.”
In a news conference in Brussels, officials were at pains to say that “simplification” was not the same as deregulation and was not a sign of giving up on the commission’s green agenda. Maria Luís Albuquerque, the commissioner for financial services, said she expected many companies would voluntarily choose to follow the sustainability reporting rules because they had already made their own commitments or would report under simpler guidelines as members of the supply chains of larger companies.
The proposals were intended to “alleviate the burdens and the costs of reporting, but maintaining preserving the anchor in our Green Deal objectives,” Ms. Albuquerque said.
The commission on Wednesday also announced a series of measures it called the Clean Industrial Deal, aimed at decarbonizing Europe’s economy. It came on the same day that the European energy giant BP said it would increase spending on oil and gas while sharply reducing investments in clean energy.
