The European Commission has introduced the Omnibus Package, a significant regulatory reform aimed at reducing bureaucratic complexity in sustainability reporting.
Zeidler recently delved into the new omnibus package and what it means for firms.
Announced by European Commission President Ursula von der Leyen on 8 November 2024, the initiative seeks to streamline sustainability-related legislation and alleviate the regulatory burden on businesses. The Omnibus Package was officially published on 26 February 2025 and is designed to harmonise existing sustainability regulations across various sectors.
The Omnibus Package targets two key objectives: minimising administrative burdens linked to sustainability compliance and aligning corporate sustainability reporting requirements. The legislation impacts three major sustainability laws: the EU Supply Chain Directive (CSDDD), the Corporate Sustainability Reporting Directive (CSRD), and the EU Taxonomy Regulation.
The reform is divided into two main parts: Omnibus I and Omnibus II. Omnibus I includes amendments to key sustainability directives and regulations, such as the EU’s corporate sustainability reporting framework and the carbon border adjustment mechanism.
Omnibus II focuses on enhancing the efficiency of EU guarantees and simplifying reporting requirements, particularly within financial regulations.
A Call for Evidence has also been issued to amend key EU Taxonomy Delegated Acts, including the Taxonomy Disclosures Delegated Act, the Taxonomy Climate Delegated Act, and the Taxonomy Environmental Delegated Act.
One of the most significant areas of reform involves the CSRD, which came into force on 5 January 2023. This directive mandates companies to report sustainability information following European Sustainability Reporting Standards (ESRS). The Omnibus Package seeks to reduce the CSRD’s reporting burden by limiting its scope, introducing voluntary reporting standards, and postponing certain reporting deadlines. Large companies with fewer than 1,000 employees, as well as all listed SMEs, will be exempted from mandatory reporting. Sector-specific ESRS will also be discontinued, reducing the number of prescribed data points. Additionally, the package proposes delaying reporting obligations for certain companies by two years.
Changes to the EU Taxonomy Regulation are another focal point of the Omnibus Package. Companies will now have the option to opt out of Taxonomy disclosures if they do not claim alignment with the EU Taxonomy framework.
The EU Supply Chain Due Diligence Directive (CSDDD), adopted on 13 June 2024, also faces amendments under the Omnibus Package. The directive requires companies to assess human rights and environmental impacts across their supply chains. Proposed changes include a one-year delay for the initial phase of implementation, a relaxation of climate transition plan requirements, and a reduction in due diligence monitoring frequency from annual reviews to every five years. Additionally, the minimum cap for financial penalties will be removed, and the requirement to terminate business relationships due to sustainability risks will be scaled back.
The Omnibus Package now awaits approval from the European Parliament and the Council. The European Commission has urged policymakers to prioritise the amendments, particularly those addressing CSRD disclosure requirements and the transposition deadline for CSDDD. Once adopted, the legislative changes will be published in the EU Official Journal before taking effect.
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