BRUSSELS (Reuters) - Investors with 6.6 trillion euros in assets under management have urged the European Union not to weaken its sustainability rules, as Brussels draws up plans to cut red tape around green finance.

The European Commission will publish a proposal this month to simplify reporting requirements under sustainability policies that some businesses have complained are overly complex.

In a joint statement on Tuesday, the investor groups including the Institutional Investors Group on Climate Change, the European Sustainable Investment Forum and the Principles for Responsible Investment said a full-scale reworking of the rules could backfire, by hampering the investments in industries that Europe is trying to attract.

"Reopening these regulations in their entirety risks creating regulatory uncertainty and could ultimately jeopardise the Commission's goal to reorient capital in support of the European Green Deal," said the statement, also signed by investors including AXA Investment Managers and L&G Asset Management.

The Commission plans to simplify the EU's corporate sustainability reporting rules, its due diligence rules - which require companies to check human rights and environmental issues in their supply chains - and a third policy which classifies climate-friendly investments.

The move aims to present a counter-offer to U.S. President Donald Trump's promise to scrap regulation, and respond to calls from struggling industries to cut red tape.

EU officials have said the proposals will include limited changes to ease the reporting burden for small businesses. But some member states, including Germany and France, want the EU to go further and delay the implementation of the regulation.

Leo Donnachie, senior policy manager at IIGCC, said losing access to information on companies' sustainability credentials could be a barrier to investment as Europe races to compete with China and the U.S. in clean technologies.

"Investors need access to this information to make our decisions," he said.

   Other industry players disagree. The current data requirements are "too much of a bureaucratic burden to the industry," said Patricia Volhard, head of European Funds Regulatory practice at the law firm Debevoise & Plimpton.

Former European Central Bank chief Mario Draghi has said the EU needs up to 800 billion euros in annual investments to keep pace with economic rivals.

Donnachie said Brussels should consider streamlining technical parts of the sustainability rules, but that delaying or overhauling them would create unwelcome instability.

(Reporting by Kate Abnett and Virginia Furness, editing by Jan Strupczewski and Ros Russell)