In February 2025, the European Commission presented the Omnibus Simplification Package. The aim of this package is to reduce the administrative burden for companies in the field of sustainability reporting and due diligence. The proposals focus on the CSRD (Corporate Sustainability Reporting Directive), the CSDDD (Corporate Sustainability Due Diligence Directive) and the EU Taxonomy Regulation.
Since its publication, the legislative processes have not stood still. In June, the European Parliament's rapporteur presented his draft texts and shortly afterwards, on 23 June, the Council of the EU adopted its negotiating mandate. This lays the foundation for the next phase: after the summer, the vote in Parliament will follow, after which the so-called trilogue process (the negotiation between the Commission, Council and Parliament) will start.
CSRD: Fewer companies, fewer obligations
One of the most important changes within the Omnibus package concerns the CSRD. The Commission wants to limit the reporting obligation to large companies with more than 1,000 employees and an annual turnover of more than 50 million euros, or a balance sheet total above 25 million euros. However, the European Parliament and the Council are calling for an even higher lower limit; they mention turnover thresholds of 450 million euros and, in the case of Parliament, even a uniform limit of 3,000 employees.
In addition, the preparation of climate transition plans is no longer mandatory and control is also limited. For example, in the Omnibus package, the Commission proposes to remove the reasonable assurance obligation; limited assurance remains the norm for the time being: the minimum required level of control under the CSRD. Reporting on the value chain is also restricted: companies only need to collect information about direct business partners. Small and medium-sized enterprises that report voluntarily may only be asked for information that falls under the voluntary SME standard.
CSDDD also significantly modified
Major adjustments are also expected for CSDDD. The Commission proposes that the rules should only apply to companies with more than 3,000 employees. Parliament is aiming for a threshold of 5,000 employees and an annual turnover of at least 1.5 billion euros. The due diligence obligation is limited to the first link (the first direct partner in the supply chain: Tier 1), unless companies identify demonstrable risks further down their value chain.
There will also very likely be no harmonised European liability regime; Member States retain the freedom to set their own, stricter rules. However, a maximum of fines is set: they may not exceed five percent of the company's worldwide annual turnover.
More room for customisation of the EU taxonomy
The proposed amendments to the EU Taxonomy Regulation also aim to make administrative costs more flexible and reduced. Medium-sized companies (between 1,000 and 3,000 employees) will particularly benefit from the proposals, which are based on voluntary and flexibility in reporting. In doing so, the Commission is responding to the broader desire to significantly reduce the regulatory burden for this group of companies.
Uncertainty reigns with Green Claims Directive
The ambition to simplify laws and regulations has also reached the discussion about the Green Claims Directive. This directive was supposed to oblige companies to substantiate sustainability claims such as "climate neutral", "biodegradable" or "100% natural" with evidence. Nevertheless, the Commission surprisingly announced on 20 June that it would withdraw the proposal, under pressure from the EPP group in Parliament.
This abrupt change of course led to strong criticism from NGOs, especially since the legislative process had been running since 2023 and was about to be completed. Shortly after the announcement, the Commission announced that it still wanted to keep the proposal, but only if micro-enterprises (with fewer than ten employees) are excluded. In the last draft text, these companies still fell within the scope of the directive, which the Commission considers to be at odds with its aim of administrative relief.
Twist fits into broader trend
This pivot is part of a broader trend in which the Commission leaves more room for economic feasibility and feasibility, even if this is sometimes at the expense of sustainability ambition. It is not only NGOs that are expressing concerns; the business community is also divided about this new pragmatic course of the European Commission.