By Virginia Furness

LONDON (Reuters) –

A group of sustainable finance experts advising the European Union has proposed changes to classify climate-friendly activities, aiming to reduce companies’ reporting burden by a third.

The suggested simplifications to the EU’s green investment rulebook precede a review of the EU’s broader sustainability rules, as Brussels plans to cut red tape around green finance.

Amid pressure from member countries like France for simpler business regulations, the EU feels competitiveness concerns due to U.S. President Trump’s deregulation efforts.

To enhance green investment and lessen the burden on businesses, the EU advisers proposed requesting less information from certain companies, allowing more flexibility in the use of proxies and estimates, and other measures to streamline the EU’s taxonomy regulation.

The EU taxonomy serves to classify which segments of the economy can be marketed as sustainable. Companies in scope must disclose investments, lending activities, or business activities that comply with these criteria.

Proposed changes also aim to simplify compliance with the “Do No Significant Harm” criteria, which banks, investors, and companies must meet to ensure a green investment or activity does not negatively impact other environmental objectives.

Collectively, these suggestions should lessen the reporting burden on non-financial companies by a third, according to the EU Platform on Sustainable Finance, assigned by the European Commission to improve the taxonomy.

The proposals focus on the taxonomy rather than wider corporate green reporting requirements. For banks and investment firms, the changes will significantly ease reporting on the proportion of their green assets and streamline processes to ensure green investments do not adversely affect other environmental goals.