In February 2025, the European Commission put forward the Omnibus proposal, aiming to ease some of the sustainability regulations for companies operating within the EU. This unexpected move has sparked quite a bit of discussion, especially since many businesses have already started investing resources into reporting under the new rules. In addition, the Corporate Sustainability Reporting Directive (CSRD) is already mandated by law in several member states.
At this point, it is important to stay cautious. There is no guarantee the Omnibus proposal will pass or be adopted as it stands. It’s worth noting that the proposal doesn’t mean getting rid of reporting requirements altogether – rather, it’s about relaxing some of the more demanding rules and giving companies more time to comply.
What changes does the Omnibus proposal suggest?
The proposal focuses on several key areas of EU sustainability regulation:
- For CSRD/ESRS, companies that haven’t reported yet could get a two-year extension. Companies with fewer than 1,000 employees might be exempt from mandatory reporting, and some sector-specific standards may be removed. They’re also considering simplifying the ESRS standards.
- The CSDDD would narrow supply chain responsibility to direct suppliers only, move assessments from every year to every five years, ease penalties, and remove civil liability.
- The EU Taxonomy reporting would apply only to companies with over 1,000 employees, freeing about 80% of companies from mandatory reporting. Partial taxonomy reporting would be introduced.
- For CBAM, smaller importers might be exempt, emissions tracking rules could be eased, and implementation pushed back from 2026 to 2027.
What happens next?
The Omnibus proposal isn’t law yet. It still needs to go through both the Council of the EU and the European Parliament before anything is final.
The Council has set up a special body to handle these simplification ideas, which could speed up their part of the process. The Council makes decisions by qualified majority — meaning 55% of member states representing at least 65% of the EU population must agree. Blocking the proposal would require at least two major countries to oppose it, which is considered unlikely.
The Parliament is expected to debate the proposal more vigorously. The Social Democrats and Greens are likely to oppose it, while the European People’s Party (EPP), holding the most seats, supports it. For the proposal to pass, EPP will need support from either the centre-left or the far-right.
If approved, the directive should be finalised sometime in 2025, no later than the end of the year. Then member states will have 12 months to make it part of their national laws.
What should companies do?
Even if the rules change, corporate responsibility remains a key part of running a sustainable and successful business. It’s also essential for maintaining trust with stakeholders, since backing away suddenly can send confusing signals. The data and insights gained from reporting are valuable for business development beyond just meeting legal requirements.
At this stage, companies should stick to their values, maintain consistent actions, and continue the sustainability efforts they have started. While the Green Omnibus may seem like a major shift, its main goal is to make it easier for companies to meet responsibility requirements over time.
