Background
The EU Green Deal has been subject to ongoing negotiations and revisions. As part of this trend, several initiatives have been launched to revisit existing EU sustainability legislation, including the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy. The Draghi report, published on 9 September 2024, highlighted the potential impact of the accumulation of EU sustainability legislation on the EU’s competitiveness and suggested that simplification could be beneficial.
Details of the Omnibus Simplification Package
On 29 January 2025, the EU Commission introduced the Competitiveness Compass, a plan to streamline legislation and enhance European competitiveness. This plan includes the Omnibus Simplification Package, which aims to reduce reporting burdens for companies, particularly small and medium-sized enterprises (SMEs). The Commission's Work Program for 2025, published on 12 February 2025, further emphasized the importance of simplifying the EU's sustainability regulatory environment.
The Omnibus Simplification Package is expected to include simplifications in sustainable finance reporting (CSRD), sustainability due diligence (CSDDD), and taxonomy (EU Taxonomy). The proposal will likely prioritize streamlining these directives and may introduce a new category of SMEs with adapted requirements.
Future developments
While the exact details of the proposal are still unclear, several potential amendments have been suggested based on the positions of key EU stakeholders. These include postponing the enforcement of the CSRD, CSDDD, and EU Taxonomy obligations, reducing the scope and regulatory burden of these directives, and focusing CSRD indicators on climate objectives. Additionally, there are suggestions to simplify reporting requirements for mid-sized companies and to cap the reporting demands on large companies.
The Commission’s proposal is expected to spark discussions within both the Parliament and the Council. Some stakeholders advocate for fast-tracking the Omnibus Simplification Package to enhance competitiveness and reduce regulatory burdens, while others call for a thorough examination to avoid hasty amendments to recently adopted legislation.
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