Monday Morning Briefing CW 14, 2025

April 6th, 2025

Regulatory News

EU Proposes Looser CO₂ Emission Rules for Automakers

On April 1st, 2025, the European Commission proposed extending the compliance period for automakers’ CO₂ emissions targets from one year to three years (2025-2027). This move aims to provide flexibility to European car manufacturers struggling to increase electric vehicle sales amid competition from China and the U.S. Critics argue it may delay the adoption of electric vehicles and necessary infrastructure investments.

EU Proposes Reduction in Sustainability Reporting Requirements

The European Commission has proposed the Omnibus Simplification Package to reduce sustainability regulations, impacting directives such as the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). This proposal aims to decrease the number of companies required to report on sustainability by 80% and limit mandatory due diligence to Tier 1 suppliers. The fashion industry is divided on this initiative; some view it as a necessary reduction of bureaucracy, while others fear it undermines progress in sustainable supply chains.

EU Parliament Votes to Freeze Sustainability Rules

On April 3rd, 2025, the European Parliament voted to delay the implementation of certain sustainability reporting rules. This decision allows lawmakers additional time to renegotiate exemptions, particularly for smaller businesses. The postponement affects reporting requirements for firms with fewer than 500 employees and non-public interest larger companies, now deferred until 2027, with first reports due in 2028. Additionally, the EU supply chain law will be delayed by one year to 2028. While industry groups support the simplification, critics argue it could undermine corporate accountability and regulatory stability.

UBS Adjusts Sustainable Investment Criteria

UBS Asset Management, overseeing $1.8 trillion in assets, has removed certain exclusions on investments in defense companies from its sustainability funds. This policy shift aligns with other European asset managers supporting defense sector investments amid rising geopolitical tensions. UBS continues to exclude controversial weapons like cluster munitions and biological weapons.

DWS Settles German ESG Probe with €25 Million Fine

DWS, the asset management arm of Deutsche Bank, agreed to a €25 million fine to settle an investigation by German prosecutors into allegations of greenwashing. The probe concluded that DWS had negligently misstated its ESG credentials in its 2020 annual report. The firm has since enhanced its internal procedures and fully cooperated with investigators.

Fashion Companies’ Sustainability Reporting Under Scrutiny

An analysis of FY24 reports from 12 major fashion and beauty companies, including LVMH, L’Oréal, Kering, and Prada Group, revealed that while most mentioned ESG initiatives, none linked these to financial performance. Experts suggest this disconnect may stem from concerns about alarming investors, as sustainability investments often yield delayed returns.

Upcoming Regulatory & Corporate Events

April 8th, 2025: EU Energy Law Review Discussions. The European Commission plans to discuss changes to EU energy laws as part of an initiative to reduce regulatory burdens on industries. These discussions may lead to an omnibus package aimed at easing regulations for small and mid-cap companies, expected to be released in May.

This article was created with the assistance of AI and carefully reviewed, edited, and refined to ensure accuracy and clarity.