Omnibus, AI, Net Zero, Pay Gap & Food

Thrown under the Omnibus?

This week the EU Commission published its much-awaited changes to the alphabet soup of sustainability reporting and disclosure regulation that it has rolled out. Late last year, the Commission President Ursula von der Leyen announced plans to “simplify” the Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy and the Corporate Sustainability Due Diligence Directive (CSDDD) into a single piece of legislation (henceforth known as the Omnibus legislation). Earlier this year we reflected on the implications of this, concluding that while simplification is almost always welcome, that should not be at the expense of rigour.??

?At the time, the promise was that the legislation would not be watered down. What emerged this week in the Omnibus is a singular definition of “not watered down”, as the proposed changes (leaked over the past few weeks by those close to the discussions) reduce both the ambition and the reach of the current regulation. It is important to note that this proposal has been presented to the Commission, but still needs to be voted on and adopted. This process will take several months, and may lead to further change yet.??

But we have moved beyond leaks and rumours to having a full summary of the proposed changes, which is available here. There are a few key takeaways.??

The biggest axe has fallen on CSDDD (which was already significantly watered down from what was initially proposed after heavy lobbying from business), with a focus on direct suppliers only, reduction in the importance placed on climate transition plans, limited enforcement and liability for non-compliance and delays to implementation. CSRD keeps the double materiality focus and (we assume) topic areas, but there is a promise to “substantially reduce” the data points required and sector standards have been removed (arguably the element that would have been most useful for many companies and stakeholders). Around 80% of companies who were due to produce their first reports in the next couple of years will now no longer be required to report, and the application to companies still in scope but due to report for the first time in 2026 and beyond is delayed by two years. It’s unclear what this means for companies in wave 1 who may well already have published their first set of CSRD-aligned reports for FY24, but we’d expect some visibility on what their FY25 reports will need to include relatively soon.??

This is described – still – as a simplification. And arguably, not reporting on your sustainability impacts is indeed simple. But it isn’t really simplification, so much as a declaration by the EU that only the largest, most well-resourced businesses should be reporting on their sustainability impacts in a structured and transparent way.??

?Communications from the EU Commission emphasises that the proposed changes will release businesses from the “very burdensome” regime put in place by (checks notes) the EU Commission, and how these changes will boost competitiveness and unlock investment. And how – apparently – it will do this while still supporting the Green Deal objectives which the legislation was designed to support in the first place. There’s some muddled thinking going on there. And civil society and indeed many investors and businesses are outraged, by the fact they have been shut out of the process of renegotiation, and by the fact that the effort and time they have already devoted to this now seems to have been wasted.??

But no one likes bureaucracy, except bureaucrats, and there was much that was imperfect in the existing legislation. It encouraged everyone to focus hard on disclosure, which in many cases took the focus away from action: certainly, it generated a lot of heat and arguably not a great deal of light. Good news for the sustainability reporting industry, bad news for those of us who like our sustainability reporting with a side order of tangible and meaningful change.??

The underlying intent of all of this was never really about disclosure, it was about change. It was about asking businesses to think about where their impacts and risks lie and encouraging them to act on these. The science of climate change is exactly as it was a week ago. The threat to nature and biodiversity hasn’t gone away. The risks to human rights in value chains remain. We can remove the requirement to talk about it publicly, but the risks (and the opportunities) that material sustainability issues present to a business remain unchanged. Boards should want to know what these are, and should be thinking about how to manage them, and how to engage in honest and transparent discussions with stakeholders about them.??

So if you’re breathing a sigh of relief that you’re off the hook for sustainability reporting (for now, at least) and can shelve those plans for a double materiality assessment, it’s probably worth a bit of reflection. What may seem like a win in the short term for efficiency and competition may end up severely disadvantaging your business in the long run if it is taken as a signal to down tools on sustainability and focus on other priorities.??

Much is still uncertain. But our view is that as things pan out in the weeks and months to come it will be important to take the time to stop and think. To reflect on what you’ve learned and what it means for you going forward. To consider if there are elements that you might want to adopt voluntarily, or collaborate on with others in your sector and beyond. And ultimately, if you have more flexibility at least in the near term, to find your own path to using disclosure to drive the change that will make your business more resilient and more successful. We’d love to have a conversation with you about how to do that.??

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Make It Fair?

Tuesday marked the end of the UK government’s consultation on allowing AI developers to train their models using copyrighted material. Labour’s upcoming AI Opportunity Action Plan pushes for scrapping copyright and IP laws to enable broader data-mining of art and writing. Critics warn this would strip creators of control as AI scrapes their work without consent, credit, or compensation. Music legends like Elton John and Paul McCartney have joined forces with publishers, artists, and media groups to fight back against Big Tech’s push for deregulation.?

In light of this context, the Make It Fair campaign has received significant coverage this week across national media outlets, urging the British public to write to MPs and demand AI firms compensate creators for their work. The campaign highlights the risk posed to the UK’s thriving creative industries, worth over ￡120 billion annually, if the government weakens copyright protections in favour of AI development. Think about it—no music, no art, no storytelling. Just a world of AI-generated mimicry. The children’s book author Ged Adamson puts it nicely: “Imagine asking ChatGPT to generate your child’s artwork instead of asking the child. And then sticking that on the fridge. It’s a horrible thought, isn’t it?”.?

In a similar vein, a powerful silent album, Is This What We Want?, has been released in protest, featuring over 1,000 musicians, including British icons Kate Bush, Annie Lennox and Damon Albarn. The album is made up of recordings of empty studios and performance spaces. It’s a haunting preview of what could happen if AI companies are allowed to siphon off creative work for free. The creative industry is what Britain is famous for – if we don’t protect it, it will disappear.??

With the consultation officially closed, the question is: will the government listen? Time to turn up the volume on this debate.?

Growth is Green?

Back in 2019, the Conservative government wrote the UK’s target to be Net Zero by 2050 into law. Since then, the economics of the move have been contested politically. This includes backtracking from within the Conservative party with Kemi Badenoch saying it was a mistake and “leaves us economically worse off”. Reform UK promised to scrap “stupid” Net Zero if they come into power, saying it is “crippling the UK economy”. But are these claims true??

Well according to the Confederation of British Industry, it’s a hard no. They, alongside the Energy Secretary, Ed Miliband, see environmental action as essential for future growth. In fact, the net zero economy has grown 10% since last year. Not only this, but while a lot of the UK’s most productive economic activity is concentrated within London and the South-East, the net zero economy is more geographically diverse. With the sector offering salaries on average 15% higher than the UK average, this could be an opportunity for the country to tackle geographic inequality as well as carbon emissions.??

In fact, there are a lot of benefits of going green. By being proactive, the UK can strengthen its economy, increase energy security and improve standards of living, to name a few. Take it from the CBI’s chief economist, Louise Hellem “It is clear, you can’t have growth without green – 2025 is the year when the rubber really hits the road, where inaction is indisputably costlier than action.” If your business is interested in looking at its own journey to Net Zero, you know where to find us!?

Mind the (socioeconomic pay) gap?

On average, employees from lower socioeconomic backgrounds are paid 12% less than those from middle class backgrounds despite being in the same profession. What’s more, the ‘class ceiling’ (a term used to describe how an employee’s socio-economic profile limits their ability to progress in their career), is a bigger influence on career progression than gender or ethnicity.???

Yet we don’t often talk about the socio-economic pay gap; conversation usually begins and ends at recruitment and hiring practices, rarely focusing on how employees progress once they’re in a job.??

But Zurich UK is pushing against the tide, becoming the first UK insurer to publish its socioeconomic pay gap, as part of a ‘commitment to understand and implement social equity drivers’. Their disclosure reveals a median pay gap of 4.2% between employees from professional and lower socio-economic backgrounds, which they hope to reduce through a series of initiatives they will implement to improve their social equity, including skills-based hiring and support of apprenticeships and programmes that enable progression.?

Zurich UK’s support of apprenticeship programmes speaks to the hugely effective routes that apprenticeships can provide to help people into employees. A recent report urges government support for businesses to enhance social mobility, highlighting targeted apprenticeship incentives for marginalized groups.?

At a time where DEI initiatives are being stripped back and socio-economic mobility falls to the bottom of the pile, it’s refreshing to see a maintained effort to drive forward change, even if it’s not easy.?

Good food?

Good food tastes even better when it does good, so next time you’re dining out, why not check out some of the social enterprises that are using hospitality to create fresh starts and second chances.?

Primrose Hill’s newest eatery Home Kitchen serves more than just a fine dining experience, as the restaurant provides employment and training for people that have experienced homelessness. Similarly, Trampoline Café in Cambridge provides barista training and employment to refugees, helping them integrate into their new communities.?

In the criminal justice system, there are The Clink restaurants, set within the walls of working prisons where meals are prepared and served by inmates working to gain skills and qualifications they need to make a fresh start. Meanwhile, outside the prison walls Tap Social serves ‘criminally good’ beer and bakes while helping to turn the lives of prisoners and prison leavers around by offering meaningful work and training.?

And last but very much not least, The Long Table champions food as a right, not a privilege, running a ‘pay-what-you-can’ model to ensure everyone gets a seat at the table.?

These businesses are proving that hospitality isn’t just about good food and good service – it’s about creating lasting impact, one meal at a time.?