Changes proposed in the European Commission’s simplification omnibus would exempt large oil and gas companies from reporting under the EU Taxonomy.
In its Delegated Act proposal, the Commission introduces a new threshold: if companies have less than 10% taxonomy-relevant activities, they would no longer be required to report. WWF’s new briefing finds that this would exempt major oil and gas companies from disclosing their Taxonomy alignment. This would create a major data gap, making it harder to assess the green performance or the transition claims of companies, just as financial institutions and investors are beginning to integrate Taxonomy data into their decision-making processes.
“Instead of addressing existing reporting challenges, these amendments risk creating additional legal uncertainty, increasing compliance costs for some firms, and failing to resolve key transparency issues. Such changes would erode trust in the EU’s regulatory consistency, particularly since these rules have been in development for almost a decade and already implemented for the past two years”, said Vedran Kordic, EU Taxonomy coordinator at WWF European Policy Office.
The European Commission has also proposed changes to the Taxonomy Delegated Acts regarding technical screening criteria for economic activities that could weaken protections against pollution. The proposed amendment may allow harmful substances such as hormone disruptors in cosmetics, certain neurotoxins and TFA, a PFAS, also known as “forever chemical”, to be classified as sustainable. The accumulation of PFAS in drinking water has raised alarms due to its potential long-term health impacts.
“This proposal suggests that the Commission is acting out of haste rather than strategy. By cutting reporting obligations before properly assessing their benefits, the EU is dismantling key transparency mechanisms and disregarding its own principles of evidence-based policy-making. The EU Taxonomy has become a global benchmark, inspiring more than 50 jurisdictions to develop similar frameworks. It provides critical data granularity for investors, policy-makers and regulators, informing decisions on public and private funding. Deregulating the framework now instead of truly simplifying it would undermine its effectiveness at a time when the market needs greater transparency, not less”,said Sebastien Godinot, Senior Economist at WWF European Policy Office.
The Commissioner for Financial Services, Maria Luís Albuquerque, will speak to the ECON and ENVI Committees in the European Parliament on 8 April, about the European Commission’s proposal to “simplify” the Taxonomy Delegated Acts. WWF calls on the Commission to lower the materiality threshold and calls on the Council and Parliament to maintain the initial, identical scope for the Taxonomy and the CSRD. Instead of weakening the framework, the Commission should also focus on refining Taxonomy criteria and expanding coverage to more economic activities to enhance its effectiveness.
