Tim Mohin: EU’s New ‘Omnibus’ – Simplification or Rollback?
Companies racing to meet the EU’s Corporate Sustainability Reporting Directive (CSRD) requirements are now facing an added layer of complexity as the rule is set to be re-opened and potentially changed. Less than a month before reporting begins, EU ministers, in a simplification drive, have decided to create a new omnibus regulation combining CSRD and two other sustainability rules.
The new “simplified omnibus regulation” will consolidate the CSRD, the EU taxonomy – a regulation categorizing “green businesses” and the Corporate Sustainability Due Diligence Directive (CSDDD) – a regulation requiring companies to identify and mitigate environmental and social harm in supply chains. This change was prompted by key EU figures asking for less burdensome sustainability regulation.
While there are more questions than answers at this point, published reports claim that the new regulation will be issued on February 26th, 2025, less than three months from now. We also know that this action will re-open the legislative process on these three key policies, which were considered completed.
Reopening these rules will likely lead to attempts to scale back some or all of these regulations. Marie Toussaint, a French Green MEP said, “Although they say simplification will not mean deregulation, I’m really afraid that that’s exactly what’s on the table.”
As pointed out in this piece by Andreas Rasche, the timing of this couldn’t be worse. There are still member states that have yet to transpose the CSRD and may hold off until after the omnibus goes through the legislative process. Plus, all of this leads to further uncertainty, with thousands of companies preparing to issue their first CSRD reports.
With confusion swirling and the pendulum swinging to deregulation, the EU confirmed the Deforestation Rule (EUDR), which has gone through multiple changes in the last few months, has been finalized (well, almost, it still has a few more votes). An expected year delay until December 31st, 2025, was maintained. However, unexpectedly, a controversial measure to exempt ‘no risk’ countries was dropped.
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