The EU Omnibus proposal, introduced on February 26, 2025, aims to simplify sustainability due diligence and reporting obligations under the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD) and the taxonomy regulation. Key proposed changes include a reduction in the number of affected companies, changes in the due diligence obligation and decreased data points for sustainability reporting. A separate proposal includes proposed delay to application deadlines for both the CSDDD and the CSRD. However, the proposals are still in the early stages of negotiation and must go through the legislative process. For the proposal regarding the delays, the European Commission has proposed going through a faster track, leaving more time to negotiate the other proposed changes.
Current status and next steps
The European Commission has initiated the legislative process by submitting the proposal to the European Parliament and the Council of the EU. The next steps involve:
- First reading: The European Parliament and the Council will review the proposal separately and may suggest amendments and develop their own positions.
- Negotiations: Discussions between the Commission, Parliament, and Council in trialogues aim to reach a compromise on the final text.
- Final approval: Once all three institutions agree, the directive will be voted on in the Council and the Parliament and then formally adopted.
A critical milestone is approaching: the European Commission will vote on April 1 on whether the proposed delays can be handled in a fast-track process. For the part of the proposal that concerns changes to the due diligence and reporting requirements, the legislative process may take years, depending on how easy it is to find alignment between the EU institutions. In the meantime, the national laws that have been implemented apply, and the deadline for transposing those not yet implemented in national law still stands.
Implications for companies
This period, until there are any changes to these laws formally adopted, is an opportunity to refine sustainability strategies, build stakeholder confidence, and make use of the key concepts in the laws.
The delays mean temporary unclarity, and for some potential relief, but companies should not pause their sustainability efforts. Stakeholders, including investors and supply chain partners, continue to expect transparency and due diligence. You should use this time strategically by:
- Conducting or updating double materiality assessments to align the business strategy with key impacts, risks and opportunities.
- Implementing robust sustainability due diligence to prevent and mitigate environmental and human rights impacts.
- Strengthening sustainability reporting to meet stakeholder expectations and track performance effectively.
By conducting thorough double materiality assessments, you can pinpoint the most significant sustainability impacts, risks and opportunities, which helps to allocate resources effectively and make informed strategic choices. This is crucial to prevent and mitigate negative impacts and useful for data collection and reporting, with a focus on performance and progress.
As the legislative process develops, it is crucial to stay agile and well-informed. Companies should maintain open lines of communication with stakeholders, from investors to supply chain partners, ensuring transparency and building trust. At the same time, companies should continue to embed sustainability into their core business strategy, viewing it not as a compliance exercise but as a fundamental driver of long-term value creation.
By focusing on these areas, you can navigate this evolving landscape with confidence, turning the current uncertainty into an opportunity for growth and positive impact.