By Virginia Furness and Kate Abnett

(Reuters) -More than 100 companies and investors on Tuesday warned against rolling back European sustainability rules that they said support economic growth, as the EU negotiates cuts to the rules to reduce costs for local industries. 

A group of 29 businesses and 80 investors and financial institutions including EDF, Nokia and Allianz said in a statement that rather than hindering growth, the rules were "conducive to competitiveness and growth, as well as long-term value creation and subsequent returns for investors".

European Union policymakers are negotiating proposals that would loosen the bloc's corporate sustainability reporting rules for a large majority of businesses, and soften a policy requiring firms to check their supply chains for abuse, amid criticism from some governments and industries that red tape hinders productivity.

Germany, France and some businesses have demanded the reporting requirements be dramatically reduced, but environmental campaigners and now a broader group of companies and investors say the rules are key to helping them manage climate risks and drive capital to the green transition.

By promoting transparency and responsible business conduct, the rules are conducive to growth, better risk management and to reorienting investment to green technologies and growth across the bloc, said the statement, which was also signed by IKEA's parent company Ingka Group. 

"Where there is room for smart simplification, let's tweak the regulation, but we need to stay the course and be proud of it to assert our leadership," Carine de Boissezon, chief impact officer at EDF, said in a statement. 

The group recommended that the EU reporting rules apply to companies with more than 500 employees, and require firms to adopt "transition plans" showing how they're aligning with climate goals.

The European Commission has proposed exempting companies with fewer than 1,000 employees - cutting more than 80% of the roughly 50,000 currently covered. The law currently applies to firms with more than 250 employees.

Some EU lawmakers want to scale back the laws further to only cover companies with at least 3,000 employees. EU countries and lawmakers must both approve the final changes to the rules.

(Reporting by Virginia Furness; Editing by Paul Simao)