The European Union is expected to publish an Omnibus Simplification Package (Omnibus) in February 2025 aimed at consolidating existing EU corporate sustainability reporting requirements. Those requirements are contained within the EU Taxonomy Regulation (the Taxonomy Regulation), the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). The EU Commission President, Ursula von der Leyen, announced the intention to introduce the Omnibus on 8 November 2024.

What is expected and when?

The detail of the Omnibus has yet to be announced. However, the expected deadline of 26 February 2025 for the Commission’s initial proposal may indicate that wide-reaching changes to the legislation are not envisaged.

The EU Commission President stressed, during a press conference on the Budapest declaration¹ on the new EU competitiveness deal, that the aim of the Omnibus would not be to change the content of the existing legislation, which she described as “good”. Instead, von der Leyen’s concern was “the way we get there” which involves “often redundant, often overlapping” questions and data points. The objective of the Omnibus will therefore be to “reduce the bureaucratic burden” for EU businesses in avoiding duplication in the collection and reporting of data required under the Taxonomy Regulation, CSRD and CSDDD.

Context

There is currently a significant degree of overlap and interconnectivity between the Taxonomy Regulation and the CSRD and the CSDDD. For example, the CSDDD explains that companies subject to the CSRD may meet their CSDDD reporting requirements through their CSRD report². In addition, the Taxonomy Regulation introduces an environmental sustainability classification metric to be applied to a company’s economic activities. The CSRD report requires information on what proportion of a company’s financials (such as turnover, capital expenditures and operating expenditures) are aligned with the Taxonomy Regulation.

The Omnibus would form part of the “simplification revolution” envisaged by the new EU competitiveness deal. The deal follows reports published on the future of the single market³ and the competitiveness of the EU⁴ and seeks to close the innovation and productivity gap with global competitors.

This will involve simplifying the EU regulatory framework to reduce administrative, regulatory and reporting burdens on EU businesses, in particular SMEs. In this context the European Commission has been tasked with developing concrete proposals, which seemingly includes the Omnibus, to reduce reporting requirements by at least 25% in the first half of 2025.

Outcome

There has been some concern since von der Leyen’s announcement that the introduction of the Omnibus could lead to attempts to scale back some or all of the core reporting requirements of the CSRD, CSDDD or Taxonomy Regulation. Those concerns were only heightened when, in December 2024, the European Parliament gave its final approval to a one-year delay to a landmark deforestation law, which will ban the import of beef, soy and other goods linked to the destruction of forests. Time will tell whether the proposed simplification of the sustainability reporting requirements in fact amounts to deregulation.

Footnote

¹ Budapest Declaration on the New European Competitiveness Deal – Consilium
² Directive on Corporate Sustainability Due Diligence FAQ 3.2
³ Enrico Letta’s Report on the Future of the Single Market – European Commission
⁴ EU competitiveness: Looking ahead – European Commission