Parliament’s Omnibus rapporteur Jörgen Warborn of the European People’s Party (EPP), announced the publication of draft amendments to the European Commission’s proposed “Omnibus” initiative to reduce the sustainability reporting and due requirements, suggesting significantly deeper cuts in the number of companies covered and the reporting obligations of the regulations.
The draft will form the basis of the EPP’s position in negotiating Parliament’s position on the Omnibus proposal, for its own negotiations with the EU Council on the formation of a final package.
The Omnibus proposal was released by the Commission in February aimed at significantly reducing the sustainability reporting and regulatory burden on companies, with proposals for major changes to a series of regulations including the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), as well as the Taxonomy Regulation, and the Carbon Border Adjustment Mechanism (CBAM).
One of the most significant changes proposed by the Omnibus was a dramatic increase in scope for the CSRD, moving the regulation to cover only companies with more than 1,000 employees from the current 250 employee threshold, removing an estimated 80% of companies from the regulation’s sustainability reporting requirements. The CSDDD was adopted with a 1,000 employee threshold in 2024, but had initially been set to apply with a 500 employee threshold before last-minute changes.
The EPP’s draft, however, would reduce the scope much further, with the proposal raising the threshold of companies covered by the CSRD and CSDDD to those with more than 3,000 employees and €450 million in revenue.
Several of the proposals in the Commission’s Omnibus package target reducing reporting burdens on smaller businesses, including creating a limit, based on voluntary standards for SMEs (VSME), that larger companies can request from smaller companies in their value chains.
The EPP’s draft retains the VSME limit for smaller companies, but raises the threshold of smaller companies to 3,000, and adds language limiting value chain reporting requirements for companies, stating that if information is not available, companies should be allowed “to explain the efforts made to obtain the necessary information about their chain of activities, the reasons why that information could not be obtained, and their plans to obtain such information in the future,” in order to be in compliance with their sustainability reporting obligations. For obligations to identify adverse impacts in supply chains, the draft adds language stating that for smaller companies, “companies within the scope should not seek to obtain information from their business partners but rely only on information that it already reasonably available,” except in cases of identified likely adverse impacts.
Another key change proposed by the EPP draft includes removing requirements for climate transition plans, replacing it with reporting on transition plans if companies have them. Additionally, the EPP draft removes language allowing member states to individually introduce more stringent sustainability due diligence requirements for specific areas such as emerging risks linked to new products or services.
The draft changes may make it more difficult for lawmakers in Parliament to find a compromise position on the Omnibus package. Initial debates on the package in March indicated a lack of consensus, with positions ranging from scrapping the CSRD and CSDDD altogether to pushing back substantially on the reductions proposed in the package.
In a post announcing the release of the proposal, Warborn said:
“I’m entering this process with a clear ambition: to cut costs for businesses and go further than the Commission on simplification. Less red tape and fewer burdens for businesses. That’s how we strengthen Europe’s economy.”
