The European Commission has adopted “Omnibus” packages of proposals designed to simplify EU rules and boost competitiveness. These packages aim to reduce administrative burdens by at least 25%, with a target of 35% for SMEs. The proposals cover sustainable finance reporting, sustainability due diligence, EU Taxonomy, the Carbon Border Adjustment Mechanism, and European investment programmes. If adopted and implemented, the proposals are estimated to save €6.3 billion annually in administrative costs and mobilise €50 billion in public and private investment.
Key changes include:
- Sustainability Reporting (CSRD & EU Taxonomy):
- Aims to remove approximately 80% of companies from the scope of the Corporate Sustainability Reporting Directive (CSRD), focusing obligations on the largest companies with more than 1,000 employees and more than €50m turnover.
- Seeks to ensure that sustainability reporting requirements on large companies do not burden smaller companies in their value chains.
- Envisions a two-year postponement (until 2028) of reporting requirements for companies currently in the scope of CSRD and which are required to report as of 2026 or 2027.
- Reduces the burden of EU Taxonomy reporting obligations, limiting it to the largest companies (corresponding to the scope of the CSDDD), while keeping voluntary reporting possible for other large companies within the future scope of the CSRD.
- Will introduce the option of reporting on activities that are partially aligned with the EU Taxonomy, fostering a gradual environmental transition of activities over time.
- Exempts large undertakings with more than 1000 employees and with a net turnover not exceeding EUR 50 million which do not claim that their activities are associated with economic activities that qualify as environmentally sustainable under the Taxonomy Regulation. This eliminates the cost of compliance with the Taxonomy reporting rules for these companies.
- The empowerment for the Commission to adopt sector-specific sustainability reporting standards has been removed.
- The possibility of moving from a requirement for limited assurance to a requirement for reasonable assurance has been removed, providing clarity that there will be no future increase in costs of assurance for undertakings in scope.
- Sustainability Due Diligence (CSDDD):
- Mandatory for companies with more than 1,000 employees and more than €50m turnover.
- Aims to simplify sustainability due diligence requirements to avoid complexities and costs. Systematic due diligence requirements are focused on direct business partners.
- Seeks to reduce burdens and trickle-down effects for SMEs and small mid-caps by limiting the amount of information that may be requested as part of the value chain mapping by large companies.
- Intends to increase the harmonisation of due diligence requirements to ensure a level playing field across the EU.
- Removes the EU civil liability conditions while preserving victims’ right to full compensation for damage caused by non-compliance.
- Allows companies more time to prepare for the new requirements by postponing the application of the sustainability due diligence requirements for the largest companies by one year (to 26 July 2028), while advancing the adoption of the guidelines by one year (to July 2026).
- Carbon Border Adjustment Mechanism (CBAM):
- Aims to simplify the rules for companies that remain in CBAM scope, including those on authorisation of CBAM declarants, and the rules related to CBAM obligations, including the calculation of embedded emissions and reporting requirements.
- Seeks to make CBAM more effective in the long term by strengthening the rules to avoid circumvention and abuse.
- European Investment Programmes:
- Aims to make it easier for Member States to contribute to the programme and support their own businesses and mobilise private investments.
- Seeks to simplify administrative requirements for implementing partners, financial intermediaries and final recipients, notably SMEs. The simplification measures proposed are expected to generate €350 million in cost savings.
These legislative proposals will be submitted to the European Parliament and the Council for consideration and adoption.
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