The impact of the Draghi report on ESG regulation

Last week, the European Commission published a report on the future of European competitiveness prepared by Mario Draghi, the former president of the European Central Bank. The wide-ranging report criticizes EU policy-making in several areas, while urging greater ambition in others. It contains detailed – and in some cases radical – recommendations focused on three key themes: the need to support innovation, especially in the field of advanced technologies; the opportunities created by the decarbonisation imperative; and the need to increase European security, including by reducing supply chain dependency.

The regulatory burden faced by EU companies, especially SMEs, is highlighted in the foreword of the report and sustainability regulation is discussed in Part B of the detailed recommendations. The report states that "the EU's sustainability and due diligence reporting framework is a major source of regulatory burden, exacerbated by a lack of guidance to facilitate the application of complex rules and to clarify the interaction between different pieces of legislation". (Simon Witney, more at lexology.com)