EU ‘Omnibus simplification package’ on ESG reporting to be introduced in February

At The Budapest Declaration in November 2024 the European Union’s political leaders stressed the pressing need to meet the challenges that are facing the bloc’s competitiveness and support its businesses to thrive.

Following this, European Commission president Ursula von der Leyen said that the Commission will bring forward plans for a so-called Omnibus Simplification Package which will revamp the CSRD, CSDDD, and EU Taxonomy. Von der Leyen stated that the “often overlapping” reporting requirements can be combined to “reduce bureaucracy” and reporting obligations while maintaining the overall aim of these legislations.

Von der Leyen said: “We need to make business easier and faster in Europe. I will make speed, coherence and simplification key political priorities in everything we do. Each Commissioner will be tasked with focusing on reducing administrative burdens and simplifying implementation: less red tape and reporting, more trust, better enforcement, faster permitting. They will hold regular dialogues on implementation with stakeholders to discuss how best to align implementation with realities on the ground.”

She added that the European Commission “will make proposals to simplify, consolidate and codify legislation to eliminate any overlaps and contradictions while maintaining high standards.”

The new legislation is set to be introduced in February, according to a register of Commission documents for “Possible items for College agenda 11 December 2024 – 5 March 2025”. According to that register, the package is expected to be published on 26 February 2025.

Objectives of the Omnibus package are to streamline reporting obligations, reduce administrative burdens for businesses and join up and align existing sustainability reporting obligations.

“The impact of the Omnibus package is yet unknown, but potentially wide ranging”, said Mark Ferguson, public policy expert at Pinsent Masons. “It could impact large corporations, SMEs, financial institutions, non-EU companies operating in the EU market and regulatory bodies and supervisors.”

Although the planned reduction of red tape is considered by many to be urgently needed to boost the European economy, the announcement creates legal uncertainty, as businesses are already building their compliance with the CSRD, CSDDD and EU Taxonomy. Accordingly, many businesses are now asking what they can do to prepare for the Omnibus package and how they can engage with the legislation.

“Businesses can start mapping current reporting obligations and identify overlaps. They can also quantify current compliance costs, identify potential efficiency gains from streamlined reporting and develop case studies demonstrating impact on operations”, Ferguson said.

On this basis, businesses will be well-prepared to engage with relevant EU institutions and participate in public consultations. “They can also provide concrete examples of reporting challenges and potential solutions”, Ferguson said.

“When communicating with EU bodies, businesses will be best positioned if their core message is clear. They should communicate that the support the overall objectives while highlighting practical implementation challenges.” Among other things, they can flag the need for sufficient transition periods and the importance of maintaining international alignment, especially with ISSB standards.