市場分析

EU Red Tape Cuts Fall Short for Big Business

Amos Simanungkalit · 21 Mar55.8K 閱讀

Image Credit: Reuters

Austrian manufacturer RHI Magnesita, which earns around 400 million euros annually, spends about 1 million euros each year to meet EU corporate sustainability requirements. However, the company's frustrations grow with the EU's recent "Simplification Omnibus" reform, which exempts smaller firms from sustainability reporting but offers little relief for larger companies.

The 52-page reform package was intended to reduce bureaucracy and ease the financial burden on European businesses, especially in the face of cheaper competitors from China and the U.S. However, RHI Magnesita's CEO, Stefan Borgas, argued that the changes seemed minimal and did not significantly alter the situation. The company currently requires extra audits and additional staff to comply with the EU's extensive reporting requirements, which involve over 1,000 sustainability data points.

The reform package is part of a broader EU initiative aimed at boosting European competitiveness and promoting decarbonization. While smaller businesses (under 1,000 employees) are set to benefit from the proposals, which would exempt them from certain reporting obligations, larger companies like RHI Magnesita remain unsatisfied. They would see some relief through changes to supply chain transparency rules, potentially cutting compliance costs in half for large firms. However, industry associations, such as the AFEP group, argue that the reforms don’t sufficiently address the bureaucratic burden on big businesses.

Some large companies, including Schneider Electric, also expressed dissatisfaction, noting that the changes still felt minimal and did not provide meaningful simplification. While some European officials see the reforms as necessary for reducing red tape and improving competitiveness, opponents warn that the drive for deregulation could undermine corporate accountability, particularly concerning human rights and environmental issues.

RHI Magnesita’s Borgas highlighted the challenge of balancing sustainability compliance with investments in critical areas like CO2 emission reductions. He argued that the time and resources spent on compliance were diverting focus from more impactful environmental initiatives. Despite the proposed changes, there is growing concern among European businesses that excessive regulations still drain resources and hurt competitiveness, especially when compared to the U.S., which is pursuing a deregulatory agenda.

The reforms are still awaiting approval from European lawmakers, where divisions exist over the extent of the deregulation. Some argue that national governments, rather than the EU itself, are responsible for the layers of bureaucratic red tape. The economic cost of these regulations varies significantly across EU countries, with some nations experiencing much higher burdens than others.