Deregulation: How Will the EU Omnibus Impact Sustainability?
Regulation can be a tricky topic — too many rules can become complicated, but too few can stall sustainability progress.
The European Union’s omnibus regulation package aims to reduce some of the regulatory burden for companies, but many are concerned it isn’t the right way.
An open letter by Collège des Directeurs du Développement Durable (C3D), representing more than 400 French companies, asks the European Commission to “support companies with resources and guidance to ensure compliance while maintaining competitiveness”.
Unilever, Nestlé, Mars, Primark, DP World and Signify, among others, signed an open letter that says: "The most practical step the European Commission can take to support future competitiveness is to focus on developing the clear and practical guidance needed to support businesses in implementing the CSDDD".
It’s not just companies — some politicians in the European Parliament, including the group Renew Europe, oppose big changes.
Andreas Rasche, Professor and Associate Dean at Copenhagen Business School, explains: “The EU Commission must look for a balanced and inclusive approach towards the omnibus.
“Nobody is arguing against simplifications, if changes are proportionate.
“But changes to the scope and timeline of regulations like CSRD and CSDDD are not simplifications, they stand for a deregulation agenda that reflects political opportunism.”
Why is the EU omnibus package on the table?
In 2024, the Draghi Report detailed ways for the European Union to become more competitive and issues the Union must resolve.
The report reads: “Innovative companies that want to scale up in Europe are hindered at every stage by inconsistent and restrictive regulations.
“As a result, many European entrepreneurs prefer to seek financing from US venture capitalists and scale up in the US market.”
The EU Competitiveness Compass aims to address the findings of this report through simplifying regulations in the union.
In December 2024, more than 90 organisations representing civil society, businesses, banks and investors issued a joint statement urging the EU to improve its implementation of CSRD standards whilst maintaining the directive's robustness.
The European Commission plans to publish its omnibus package on 26 February 2025 with measures to streamline sustainability reporting requirements across multiple laws including the CSRD and CSDDD.
Before the omnibus’ announcement, US politicians had already voiced opposition to the CSDDD and its potential impact on companies outside the EU.
Ursula von der Leyen, President of the European Commission, has said that "the content of the laws is good, we want to maintain it and we will maintain it".
She adds: "But the way we get there, the questions we're asking, the data points we're collecting is too much, often redundant and often overlapping."
"What we in the business world want is clear implementation guidance from the commission and not the reopening of adopted legal texts for renegotiation."
The open letter from C3D reads: “ln the context of the ongoing informal consultations on the drafting of the omnibus regulations for the CSRD, CSDDD and the Environmental Taxonomy, we, the French Sustainability Officers responsible for implementing these regulations, urge you to uphold the original intent of the co-legislators and the broader Green Deal agenda.”
A position paper from Renew Europe says: “Renew firmly believes that embracing the Green Deal in a market driven approach is the only way to enhance our competitiveness and unlock genuine business opportunities. It will also strengthen our resilience against external shocks.
“The Clean Industrial Deal will be the EU’s roadmap to compete and win in the global race towards relocating key green value chains.
“It should offer a comprehensive enabling and financing framework for implementing the EU’s climate targets in a way that makes EU industries and sectors leaders in competitiveness, innovation and sustainability.”
Lara Wolters, Member of the European Parliament (S&D, NL), says the current omnibus approach is “not good enough for Europe”.
She describes the proposition as a “panic button” reaction from politicians in France and Germany and said businesses need stability and certainty to make long-term strategic decisions.
Gwenaelle Avice Huet, Executive Vice President of Europe Operations and Member of the Executive Committee at Schneider Electric, says: “The way forward is clear: to keep driving momentum, we need to accelerate innovation and digitalisation.
“Now is the time to come together with united policy and simplified processes to clear the barriers to green growth.”
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