Omnibus II Directive: purpose-driven business models and sustainability reporting

In February this year, the European Commission published the "Omnibus Package", which consists of two parts: Omnibus Directive I and Omnibus Directive II, which is the real novelty for legislative reform in the area of corporate sustainability, as it introduces significant changes to ESG reporting standards and the way companies communicate their environmental, social and governance performance.

OBJECTIVES OF THE OMNIBUS II DIRECTIVE – InvestEU

The Omnibus II Directive aims, among other things, to extend deadlines (the "Stop The Clock" Directive), simplify and optimise existing EU investment programmes, such as InvestEU, in order to reduce administrative complexity, increase efficiency in the mobilisation of funds and facilitate access for companies and public entities to European financial instruments, thereby boosting investment, innovation and the strategic autonomy of the EU.

InvestEU is the main European programme supporting strategic and sustainable investment and is a versatile instrument that can be used to support investment activities in different policy areas, in line with the EU's emerging and evolving priorities. According to the report presented by Mario Draghi to the European Commission, the Omnibus Package proposals for this programme will lead to the successful mobilisation of investment within the EU, particularly in sectors where market failures would inhibit it, boosting public and private investment.

With regard to the Omnibus II Directive in particular, the proposals aim to increase the size and efficiency of the EU guarantee, making the part of InvestEU that each Member State can mobilise for national projects more accessible and attractive to investors, encouraging greater participation of public and private capital and boosting the programme's effectiveness. These changes are expected to mobilise around €50 billion in additional public and private investment in support of EU priority policies, such as those outlined in the Clean Industry Pact, given that a significant share of the volume of operations under InvestEU supports the climate objective.

In this way, InvestEU plays a key role in promoting the investments necessary for competitiveness, research, innovation, decarbonisation and environmental and social sustainability, which is in line with the idea that "sustainability, in its broadest sense, is not an option; it is a moral and strategic obligation', as stated by Alejandro Touriño in El propósito empresarial: una mirada más allá del cumplimiento normativo(The corporate purpose: looking beyond regulatory compliance), according to which 'in a global context where consumer demands, regulation and social expectations are rapidly evolving, companies cannot limit themselves to fulfilling their traditional role of generating profits. Today, a company that aspires to lead its sector must go beyond technical excellence and must have a purpose. A purpose that is not just an advertising claim, but a real commitment to social, environmental or ethical values."

Incidentally, the proposed changes, particularly with regard to the InvestEU programme, are reflected in Alejandro Touriño's statement that "the current regulatory framework further reinforces this need for transformation". He added that ECIJA, as a company with ambitions to be a leader in the sector and which is not limited to technical excellence, enthusiastically welcomes these changes, considering them an "opportunity for continuous improvement,"which will allow the group to affirm its clear purpose of having a positive impact on society.

OBJECTIVES OF THE OMNIBUS II DIRECTIVE: Simplification of burdens

Another of the main objectives of the Omnibus II Directive is to simplify the administrative burdens caused, in particular, by information reporting requirements, which will also ease the burden on the final recipients of the investment and financial intermediaries.

One of the simplification measures is the reduction, for transactions not exceeding EUR 100,000.00, of the number of indicators to be reported, as well as the adjustment of the application of the SME definition, which will result in an exemption for small businesses, thereby reducing their costs. This will make the requirements more proportionate, without undermining the objectives of the InvestEU programme.

This "regulatory adaptation and simplification", as the Commission calls it, will inevitably have a significant impact on "sustainability reporting" — understood as the obligation for companies to report, as a minimum, on environmental, social and labour issues, respect for human rights, and the fight against corruption and bribery — which will be considerably simplified for small businesses, which is particularly appropriate. In addition to the obvious positive impact for financial intermediaries and end recipients, these simplifications are expected to save around €350 million.

Impact of the Omnibus II Directive in Portugal 

This Directive may have very significant effects on Portuguese companies, particularly with regard to the scope of application of the new requirements, as well as the raising of private capital and the implementation of investment programmes, for which bureaucratic obstacles are being reduced.

Portuguese companies will thus have more direct access to European guarantees and financing, especially in areas such as energy transition, digitalisation, industrial innovation and the social economy.

Conclusion

The Omnibus II Directive represents a decisive step towards making EU investment programmes more efficient, accessible and strategic, notably InvestEU. By simplifying processes, reducing administrative burdens and increasing the flexibility of financial instruments, it promotes the mobilisation of public and private investment, together with greater alignment with the EU's priorities of sustainability, innovation and competitiveness.

For businesses, this new regulatory framework offers an opportunity to enhance transparency, optimise resources and affirm a corporate purpose geared towards social, environmental and ethical impact.

The Omnibus II Directive aims not only to improve the financial execution of investment programmes, but also to define possible strategic instruments to transform the way companies operate, communicate and contribute to a more sustainable European economy.