By Kate Abnett
BRUSSELS (Reuters) – Austrian manufacturer RHI Magnesita spends about 1 million euros of its roughly 400 million euros earnings a year ensuring it complies with EU rules on corporate sustainability. A first wave of reforms to peel back layers of red tape will do little to cut that bill, it says.
The European Union’s 52-page ‘Simplification Omnibus’, which would exempt smaller companies from sustainability reporting and pare back obligations on supply chain transparency, has left bigger companies like RHI Magnesita frustrated and pushing for more.
The reforms were billed as a drive to remove layers of bureaucracy that cost European businesses time and money and set them at a disadvantage against cheaper rivals in China and in the U.S. where the Trump administration is aggressively rolling back regulation to spur growth.
“It looks, at least at first glance, that it actually doesn’t change very much,” RHI Magnesita’s chief executive Stefan Borgas told Reuters.
RHI Magnesita says it conducts an additional audit and employs three or four full-time employees to collect the amount of data required by the EU law, which asks companies to report on more than 1,000 sustainability data points.
The firm’s global business spans 65 production sites and employs 20,000 staff. It reported adjusted earnings before tax, interest and amortization of 407 million euros in 2024.
February’s proposals were part of a broader package of EU reforms aimed at bolstering European competitiveness and encouraging industry to decarbonise.
EU leaders discussed further rounds of reforms at a summit in Brussels on Thursday, where they published a joint statement asking the Commission to target rules around industrial decarbonisation and defence next.
The European Commission’s proposals to curb sustainability rules will bring relief to businesses employing fewer than 1,000 staff, which the plans would exempt from the reporting rules. It forecasts companies will save 4.4 billion euros ($4.77 billion) per year.
Larger companies are likely to benefit more from proposed changes to supply chain transparency rules, which the Commission says would more than halve the estimated annual compliance costs of 480,000 euros for the largest companies.
Still, big business remains unconvinced. The AFEP group of the 118 biggest private businesses in France said the proposals “do not correct the bureaucratic burden” for larger companies.
Gwenaelle Avice Huet, Europe head of French blue-chip Schneider Electric, with annual revenues of 38 billion euros, said big companies have “been a little bit set aside”. However, she did welcome the shelving of plans to introduce more specific reporting for each sector.
