GUBERNA community views on the Omnibus package
On 26 February 2025, the European Commission unveiled the Omnibus I and II package. This new EC proposal is expected to have an impact on CSRD and CSDDD. Additionally, the EU Taxonomy Regulation will be simplified, and small importers will be exempted from the CBAM regulation.
CSRD
- only targets large companies (1,000+ employees and turnover above EUR 50 million/balance sheet above EUR 25 million), which decreases the number of concerned companies by 80%
- limits data points in the reporting standards
- exclude all SMEs from the regulation, even the listed ones who were previously subject to these provisions
CSDDD
- postpones the transition deadline by 1 year, while the deadline for the largest companies is postponed by 2 years
- reduces necessary assessments and requirements
- limits due diligence beyond direct business partners unless there is plausible evidence of adverse impacts
EU Taxonomy
- companies with 1,000+ employees and less than €450 million turnover, can report voluntarily on expenditures from operational sustainable operations.
GUBERNA launched a poll that resulted in mixed views on whether the European Commission advances or backtracks on sustainability reporting with the Omnibus package. GUBERNA members also provided their insights as to the rationale, impact and the way forward resulting from these proposals. GUBERNA continues to invite members to submit their feedback to these proposals as the discussion at the European Parliament and Council has just begun. Below a first appraisal of our community’s messages:
The narrative surrounding the simplification of sustainability reporting in the European Union reflects a blend of optimism, concern, and cautious realism. The move towards more streamlined reporting is welcomed, particularly because the existing system was seen as excessively complicated. However, there is a clear understanding that simplifying reporting alone will not be enough to drive meaningful progress in sustainability. Companies that have truly embedded sustainability into their operations will continue their efforts regardless of reporting changes. The real agents of change, according to this perspective, are virtuous corporate behaviours rather than reporting mechanisms, which are unlikely to have a substantial impact on their own. Focus is thus given on meaningful compliance that requires a genuine commitment to sustainability, irrespective of the applicable legal framework.
On a different note, it is argued that the complexity of the future reporting system has not necessarily decreased. Despite the simplification, a deeper analysis is needed to fully understand the specific changes to the rules and whether they effectively address the burdens companies face. One suggestion is to adhere to more general rules while allowing supervisors to impose additional requirements based on the specific needs of markets. This approach might reduce unnecessary complexity and better balance regulatory oversight with the practical realities faced by businesses. There's also a strong desire to cut through bureaucratic red tape that, in the view of many, obstructs progress in sustainability efforts rather than facilitating it.
The evolving regulatory framework, while viewed as necessary in the context of global dynamics, must be carefully crafted to address both the climate crisis and economic realities. The notion that investment in sustainability is a positive development is acknowledged, but there is a strong belief that without clear incentives and pressures for action—such as taxation on environmental impact—genuine change will be slow.
A tax-based approach, where reporting is tied directly to environmental taxation (such as carbon emissions or water pollution), is suggested as a potential solution. This system would encourage companies to focus on measurable outcomes and would simplify the reporting framework, making it easier to audit and enforce compliance.
At the same time, the debate about whether the reduction of reporting requirements will actually lead to positive outcomes for the environment remains unresolved. There is concern that downscaling reporting too much could undermine progress. In some countries, such as Belgium, large portions of companies will be exempted from stringent sustainability reporting, potentially weakening the overall impact of the regulations. Some argue that a step back could allow for a more thoughtful and effective approach later on, but the shift in responsibility from regulatory bodies to companies to collect data is viewed as problematic. For comparison, according to some of our members’ feedback, tax credit systems, such as those in the U.S. Inflation Reduction Act (IRA), have had a more significant impact on sustainability with lower administrative burdens.
In conclusion, while the EU’s proposals represent an improvement, particularly in terms of reducing the administrative burden, the reactions from within our board member community reflect doubts about whether they will significantly enhance the competitiveness of European companies relative to global competitors. It is clear that the sustainability challenge is multifaceted, requiring not just regulatory changes but also a broader alignment of corporate practices, governmental pressure, and public accountability. The focus on simplicity, measurable outcomes, and ensuring a level playing field for businesses, regardless of size, is essential to ensure the transition to a more sustainable economy.