The EU Omnibus Legislation adds to Europe’s initiatives of reducing administrative burdens, improving coherence across EU sustainability laws, and supporting competitiveness.
On November 27, 2024, President von der Leyen launched the Competitiveness Compass, marking a significant step in the EU’s strategy to enhance its global competitiveness. As part of this initiative, the EU introduced the Omnibus Simplification Package, a major effort to simplify sustainability reporting, due diligence, and the EU Taxonomy.
On February 26, 2025, the Commission is set to issue a proposal regarding the Omnibus Simplification Package. This proposal is expected to detail the specific measures for simplifying the regulatory landscape, potentially offering more legal clarity.
But what does it entail for your organization?
What is the EU Omnibus Legislation?
The EU Omnibus aims to make the EU’s complex sustainability reporting landscape easier to navigate for organizations worldwide. The Omnibus Legislation relies on three key pillars meant to keep reporting requirements across various sustainability regulations aligned:
- Higher competitiveness
- More coherence
- Less administrative burden
President von der Leyen has emphasized that the Omnibus Legislation will not dilute existing standards but will ensure that compliance is straightforward, relevant, and non-redundant.
Currently, businesses often face duplicate and inconsistent reporting obligations due to overlapping requirements across various EU laws.
For instance, member states occasionally introduce additional requirements exceeding EU mandates. This only complicates matters, making reporting unnecessarily complex. Small companies struggled to adapt, as their role in larger supply chains often placed unintended reporting burdens on them. Specifically, once the proposal is adopted, it will help eliminate double work.
What’s included in the EU Omnibus Legislation?
Before we look ahead, let’s first understand what the upcoming EU Omnibus Legislation covers:
It’s meant to make sustainability reporting simpler
The EU Omnibus Legislation aligns sustainability reporting requirements, ensuring they meet the needs of capital providers. This also comes with clearer metrics businesses need to track based on priorities set for high-risk sectors and a focus on reducing unnecessary data essential for business operations and investor decision-making.
It introduces a small-mid-cap definition
Companies with 250-1,500 employees, revenues below €1.5 billion, or balance sheet totals under €2 billion will get their own framework. Notably, this could exempt up to 31,000 EU companies from certain sustainability-related obligations.
It reduces administrative burdens
Reporting obligations will be reduced by 25% for large firms and 35% for SMEs. Smaller companies will spend less time and resources on regulatory reporting, freeing up capital for growth, innovation, and operational improvements. They’ll also have an easier time staying compliant while not having to deal with excessive reporting demands on SMEs that supply or contract with bigger firms.
What is the timeline for the EU Omnibus Legislation?
The EU Omnibus Legislation is just the first of a series of Simplification Omnibus packages. Its timeline comes into action as soon as the European Commission’s legislative proposal is published on February 26, 2025.
While we don’t yet know how long the process will take, you can always expect new amendments or separate regulatory frameworks to impact the way the Omnibus Legislation works. 12 to 18 months is a good timeframe to rely on and stay alert for new changes.
Still, expect the legislative process to roll out across a series of stages:
- The European Commission will submit the proposal to the European Council and Parliament.
- Both institutions will conduct readings and deliberations to refine the legislation for a final pre-approval version.
- If disagreements arise, a conciliation committee will jump in to reach a compromise.
- The legislation is adopted once everyone agrees on it. In the event a legislative proposal is rejected at any stage (or the Parliament and Council can’t reach a compromise) the proposal is not adopted and the procedure ends.
What’s the impact of EU Omnibus Legislation CSRD, CSDDD, and EU Taxonomy?
Once live, the EU Omnibus Legislation will directly impact how reporting under the CSRD and CSDDD is done:
1. CSRD
With simpler metrics, companies will find it easier to report in line with the CSRD’s extensive and complex requirements. Some experts also expect delays in reporting as we’re waiting for updates on the directive.
By focusing on sector-specific reporting, companies in low-risk sectors may face fewer obligations. Improved alignment with investor needs will also enhance the relevance of disclosed data, leading to better decision-making.
💡 Read more: CSRD: Corporate Sustainability Reporting Directive guide + [infographic]
2. CSDDD
The regulation will address concerns about the extraterritorial scope of CSDDD, which has been criticized by international stakeholders, particularly in the United States.
By reducing redundancies, the regulation will clarify due diligence obligations, ensuring companies can focus on material risks rather than exhaustive compliance checks.
The legislative process ensures collaboration and checks between the European Commission, the Council, and the Parliament to achieve balanced and effective legislation. However, at any stage, if consensus cannot be reached or the proposal is rejected, the procedure ends without adoption.
💡 Read more: The all-in-one guide to CSDDD: Corporate Sustainability Due Diligence Directive
3. EU Taxonomy
The EU Omnibus Legislation will make Taxonomy-aligned reporting easier by removing redundant metrics such as the Green Asset Ratio. This will provide much more clarity into how Taxonomy requirements interact with other sustainability frameworks, including the two ones we’ve mentioned above.
Stakeholders are currently still debating this potential change. For some industries, the way things currently work brings excessive administrative burdens that negative impact. While a change is highly welcomed in this case, some stakeholders warn that reducing reporting requirements might compromise the quality and comparability of sustainability data. This is otherwise a must for making better informed investment decisions and hitting the EU’s environmental goals.
💡 Read more: EU Taxonomy 101: A comprehensive guide for 2025 reporting
Next steps
To keep up with progress on the Omnibus EU Legislation, monitor the first reading outcomes in both the Council and the Parliament. You can track the proposal in the European Parliament’s OEIL database for the latest information on the status of legislative proposals.
You can find more information on the developments from the public registers of the Council of the European Union. Use these early insights to prepare for potential adjustments to the proposal based on how things progress.
The real work starts once the regulation is approved as you’ll have to slightly tweak your sustainability reporting to meet new reporting requirements. This will likely involve understanding updated disclosure obligations, ensuring compliance with new standards, and even selecting the right reporting tools.
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