EU's Effort to Reduce Bureaucracy
On February 26, 2025, the European Commission launched the Omnibus Package. This important initiative aims to simplify sustainability rules and cut down on red tape. This package focuses on key laws such as the Corporate Sustainability Due Diligence Directive (CSDDD), Corporate Sustainability Reporting Directive (CSRD), and EU Taxonomy. The Commission seeks to simplify these frameworks. This will make it easier for businesses to comply with regulations and help the EU stay competitive on a global scale.
Key Changes in the Omnibus Package
The Omnibus package introduces significant changes to central sustainability directives. The CSDDD, initially applying to entire value chains, will now be limited to direct suppliers only. The implementation has been pushed back from 2027 to 2028. Also, the rules for civil liability and annual due diligence reviews have been removed or extended.
The CSRD has also undergone significant revisions. Previously applied to large companies with 250+ employees, it will now cover only businesses with 1,000+ employees. The start date was set for 2025, but reporting obligations are now delayed by two years. Also, sustainability disclosure requirements have been cut by 70%. Companies are no longer required to collect sustainability data from suppliers that have fewer than 1,000 employees. This change reduces the burden of reporting.
The EU Taxonomy has changed. Now, only companies with at least 1,00
0 employees and a turnover of €450 million or more must comply. Banks can now calculate Green Asset Ratios (GAR) more flexibly. They can exclude non-CSRD-covered companies. Also, the "Do No Significant Harm" (DNSH) criteria are simpler now.
Impact on Businesses
The deregulation efforts are expected to bring significant benefits, particularly for large corporations, SMEs, and financial institutions. Large companies will enjoy greater flexibility in compliance and a reduced reporting burden. SMEs used to struggle with complex regulations. Now, they are exempt from many obligations. This change makes it easier for them to comply with sustainability rules. Financial institutions will also benefit as they gain more flexibility in sustainable investment calculations and reporting.
What’s Next?
The European Commission’s proposal for the Omnibus package is not final and must be approved by the European Parliament and the Council of the European Union. These legislative bodies will discuss and refine the proposals before implementation.
Companies should prepare by:
Reviewing their compliance strategies – to align with the revised regulations.
Engaging in stakeholder discussions – to help shape the new rules.
Consulting experts – to understand how the changes affect their business.
The Omnibus package signals a significant change in the EU's sustainability regulations. It aims to balance business-friendly policies with strong environmental and ethical commitments. As the situation evolves, companies must stay informed and ready to adapt.
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