February 26, 2025, is the EU’s current target date to introduce its Omnibus Simplification Package: an initiative aimed at streamlining and unifying the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Taxonomy. While details remain scarce, it is expected that the package will alter timelines, scope – with less emphasis on smaller firms – and compliance requirements.
The announcement comes as France and Germany have raised concerns about the CSRD and CSDDD, calling for reporting requirements to be eased and compliance deadlines to be delayed, allowing organizations to deal with administrative burdens and competitiveness issues. Authorities in both regions are also calling for the removal of sector-specific European Sustainability Reporting Standards (ESRS), which are due to be introduced in 2026.
While the omnibus proposal aims to cut the administrative burden for SMEs “by at least 35 per cent”, and larger organizations “by at least 25 per cent”, its immediate impact for many business leaders will be to make long-term planning more difficult. Firms that have already invested in third-party services and systems now face evolving expectations for compliance. But decision-makers should be wary of delaying or decreasing sustainability reporting efforts, and should instead maintain their focus on sustainability compliance while staying flexible.
Firms must not lose sight of the fact that sustainability strategies go beyond compliance – in fact, for many, compliance is just the first step. As scrutiny from investors, stakeholders and auditors mounts, investing in ESG data governance and due diligence will continue to be crucial. Organizations in the US, especially, face significant concerns around brand reputation and image if they fail to step up to the plate in these areas. Regardless of whether regulatory requirements are condensed or delayed, demands for businesses to be transparent about their sustainability impacts aren’t going anywhere – at least not anytime soon.
