EU Ombudsman criticizes omnibus package: A step backwards for sustainability!

EU Ombudsman criticizes omnibus package: A step backwards for sustainability!

EU Ombudsman Teresa Anjinho has decided to open an investigation into the European Commission's new Omnibus I package, which proposes far-reaching changes to corporate sustainability reporting and due diligence requirements. The inquiry was triggered by complaints from civil society organizations that fundamental principles of good administration had been violated. These complaints have come from prominent groups such as ClientEarth, Friends of the Earth Europe and Südwind has been submitted.

Anjinho criticized the Commission for omitting the required impact assessment, which would have been essential for the legislative changes. She also criticized the limitation of interest representation, with discussions primarily taking place with industry representatives, while the broader public and other interest groups were largely ignored. The Commission also failed to provide evidence to assess climate impact in accordance with the European Climate Law.

The contents of the Omnibus I package

The Omnibus I package, published at the end of February 2025, is intended to simplify and reduce certain sustainability and due diligence obligations for companies. An important point is that the reporting obligation according to the Corporate Sustainability Reporting Directive (CSRD) will in future only apply to large companies with more than 1,000 employees or a turnover of over 50 million euros. This would exempt 80% of companies from reporting requirements. In addition, the existing reporting will be postponed to the 2027 financial year and existing standards will be simplified.

Together with the CSRD, the EU Commission is also planning adjustments to the Supply Chain Due Diligence Obligations (CSDDD). In the future, the focus of these regulations will be on direct business partners and subsidiaries, while indirect partners should only be included in the event of specific suspicions. Civil liability and minimum fines are also no longer provided for.

Criticism from experts and civil society

Stefan Grasgruber-Kerl from Südwind described the current procedure as a serious step backwards for the bus and expressed concerns about the legality of the procedure. He and other voices from civil society are calling for a comprehensive impact assessment for all political agreements, which must be in line with EU climate protection goals.

Ombudsman Anjinho not only noted the existing complaints, but also highlighted the Commission's repeated non-compliance with “Better Regulation Guidelines”. This concerns, among other things, the lack of public consultations and the failure to carry out a comprehensive impact assessment of legislative changes that would be of great importance for legal and environmental standards.

The discussion about the omnibus package could have far-reaching consequences for corporate responsibility in Europe. Despite the desired deregulation, the topic of sustainability remains a key strategic issue that is increasingly being demanded by banks, investors and business partners. Companies are well advised to actively use this phase of regulatory uncertainty and prepare for the new requirements.