Mr. Colm Forde:

For context, I will refer back to the Draghi report I referenced in my opening speech. It referred to an excess of regulatory burden impacting on a company's ability to compete in the international marketplace, and most especially SMEs. It referred to the fact that in the period from 2019 to 2024 in the US approximately 5,000 laws were passed and in the EU 13,000 laws were passed. This was already on top of a high stock of regulation. On top of this, there is a sense there is duplication of regulatory functions between various areas of law. The consideration was that there is a disproportionate administrative burden on SMEs relative to larger companies. Throughout the European Commission this has fed into the proposal and the strong political drive to reduce the administrative burden by 25% for all companies and by 35% for SMEs. This is the context behind some of the proposals.

Allied to this, the Department is developing a national competitiveness and productivity plan. The first cost of business advisory forum met last week. It will also consider regulatory issues. There is a large combination of factors that will address the regulatory burden for all companies throughout the economy. It is difficult to identify the burden reduction of any individual legislation or regulation. With regard to CSDDD, originally the due diligence was going to run through the whole of the supply chain. The change being made is that due diligence will be in the first tier of the supply chain. Where there is awareness of information that necessitates further examination beyond the first tier, this will be done. This is a significant regulatory burden removed from companies in the supply chain. The companies in scope will not have to go further beyond the first tier unless there is evidence to suggest they should do so.

The big concern about CSRD is that originally when companies in scope would be completing their reporting obligations they would pass the reporting obligations down the supply chain and seek very detailed material from SMEs. This would be a disproportionate regulatory burden for those companies. What will now be introduced is a voluntary reporting standard. The Commission will publish this. Companies in scope will not be permitted to ask for any more information beyond what is in the voluntary reporting standard. This is an example of some of the ways in which the regulatory burden will be reduced on SMEs in the supply chain of companies. To go back to the first point I made in my opening statement, 55% or 60% of companies see the regulatory burden as our biggest challenge in doing business. The ambition is that companies should be able to focus the vast majority of their time on building their business, creating employment and enhancing productivity as opposed to being overly burdened by regulation. My colleagues may want to add specifics.