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Navigating the EU Omnibus Simplification Package


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The European Union’s first Omnibus Simplification Package marked a significant milestone in the journey towards streamlined sustainability reporting and due diligence requirements. This legislative initiative aims to simplify existing frameworks (such as the CSRD standards), reduce compliance burdens and enhance competitiveness while maintaining alignment with the EU’s Green Deal and Clean Industrial Deal principles.


In brief

  • In this article series, we will start to explain how the EU Omnibus Simplification Package aims to streamline sustainability reporting and due diligence requirements, thereby reducing compliance burdens for companies.
  • There will be an article per regulation amendment (CSRD, EUTR, CS3D and CBAM), where the most important topics such as the postponed timelines, simplified reporting templates and reduced scope of affected companies will be discussed.
  • The article series will delve deeper into EY’s perspective on practical steps, so-called “no regrets” actions that companies can take to steer their organization with clarity, purpose and efficiency.

Mandatory sustainability disclosures vs. meaningful action

The release of the EU’s first Omnibus Simplification Package marks a pivotal moment for corporate sustainability. This legislative initiative aims to streamline sustainability reporting and due diligence requirements by reducing the number of disclosures and simplifying reporting obligations, effectively taking an estimated 80% of companies out of scope. Despite these changes, the Package maintains alignment with the principles of the EU’s Green Deal and its complementary Clean Industrial Deal. Simplification with a view to boosting competitiveness raises fundamental questions about the sustainability of the necessary transition.

  • Are companies willing and able to channel their available resources towards integrating sustainability into their core processes instead of using these resources for compliance with sustainability regulations?
  • Will investors prioritize long-term value creation above short-term results? Will companies focus on their key sustainability matters (e.g., guided by double-materiality assessments performed)?

These are critical considerations as they directly impact the competitiveness and resilience of companies.

Does the value of sustainability reporting change?

For some companies, sustainability reporting will become a voluntary activity, but they will still have to meet the expectations of a broad range of stakeholders, including customers, investors, affected communities and company boards. This could result in additional value, such as lower impacts from better managed sustainability risks, higher returns from seized opportunities and stronger market positioning through enhanced trust from stakeholders. In the long run, simplification could facilitate more material disclosures, demonstrating how sustainable businesses are generating market opportunities. Logically, this should also help providers of sustainable finance to deploy finance and capital in line with a just sustainable transformation.

 

Potential impacts of the changes

If the proposed simplifications can be agreed upon and effectively implemented, this first Omnibus has the potential to reduce compliance costs for businesses around the globe. It seems clear that the EU’s goal is to change the path toward sustainability, but not to reduce the ambition for achieving the transition. However, it is important for companies to recognize that, despite the European Commission’s call for swift action, these proposals will take time to navigate through the EU institutions and Member States and may see further significant changes before they can be finalized, transposed and implemented.

 

Thus, EY recommends that companies work on so-called “no-regret” actions: these are actions that are aligned with your sustainability priority agenda and with priorities defined during the double materiality assessments conducted (if done so). Refer to the next sub-chapter for a more in-depth description of “no-regret” actions.

 

For Swiss companies specifically, the Omnibus means that the Swiss law (Swiss Code of Obligations article 964 para. a-c) is likely not to change until further clarity is provided by the EU1 and the “Stop the Clock” Directive (EU) 2025/794 will give Swiss companies that are due to report based on the CSRD reporting requirements in 2026 and 2027 (so-called wave 2 and 3 companies) additional time to prepare for CSRD-conform reporting.

EY’s Point of View and market insights on “no regret” actions

In the aftermath of the first EU Omnibus Simplification Package, regulatory shifts have created both uncertainty and opportunity.
To support peer-to-peer sharing during this period of uncertainty, EY convened three sector-focused roundtables to facilitate discussion on what’s next. 

Drawing from these discussions and our broader market insights, EY has developed a series of pragmatic actions designed to help with direction, focus and efficiency. These actions are organized into three key areas:

1. Monitor - Keep track of ongoing discussions regarding the Directives and analyse existing sustainability report from peers to identify leading practices
2. Maintain - Use the additional time to complete/re-evaluate your double materiality assessment as the foundation of your sustainability strategy and disclosures.
3. Prioritize - Formalise your processes and controls for material sustainability topics. Consider usefulness of tech platforms to support future reporting needs.

Key headlines on how we are seeing companies among our clients respond:

  • Most wave 2 companies are advancing with selected parts of their original CSRD implementation program, but large-scale implementation to address all ESRS gaps are on hold until the shape of the final ESRS becomes clearer. 
  • While companies are positive about the simplification objectives, they recognize investment in resources may need reallocating with updated timelines.
  • Organizations are now leveraging this additional time to reset their plans and reprioritize sustainability strategies, beyond tick-the-box compliance.
  • Focus has now shifted beyond just CSRD to seeing the full picture of sustainability reporting to enable focus and an interconnected view. 
  • There is a sense of urgency for sustainability to reposition its role in value creation, especially after a prolonged focus on achieving compliance. A focus on the business case is even more important in today’s world of constrained resources and geopolitical tensions.

Outlook on the article series

As we explore the implications of this legislative package in the coming articles, we encourage all stakeholders to engage actively in the process and keep monitoring developments.

Each of the following articles will be focusing on one topic (CSRD, CS3D, EU Taxonomy and CBAM) and you will find the following sections in each article:

- Recap of the legislation
- Proposed changes in the EU Omnibus Simplification Package
- What impacts could the proposed changes have on businesses?
- What are the no regret actions for businesses to take?

By carefully examining our initial insights and actioning the recommendations provided in this article series and our report, your business will be better prepared to navigate the challenges ahead and contribute to a more sustainable future.

EY teams with differing focus areas are here to help you along the journey.

So together let’s embrace this chance to make meaningful adjustments in the strategic, opportunity-focused approach to sustainability across Europe.


How to navigate the EU Omnibus Simplification Package - Key implications for companies.

Read more on how the European Commission's proposed amendments impact the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CS3D), the EU Taxonomy Regulation (EUTR), and the Carbon Border Adjustment Mechanism (CBAM).

Scenic route in the Redwood National Forest in California, USA

Summary

The EU’s Omnibus Simplification Package aims to streamline sustainability reporting by reducing disclosures and simplifying obligations, thus removing 80% of companies from the scope of CSRD. Despite these changes, this legislative initiative aligns with the EU’s Green Deal and Clean Industrial Deal. Key questions arise about companies’ ability to integrate sustainability into core processes and investors’ focus on long-term value. Simplified reporting may become voluntary but still meet stakeholder’s expectations, potentially adding value through better-managed risks and opportunities. If implemented, the Package could lower compliance costs globally while maintaining sustainability ambitions. Companies should focus on “no-regret” actions aligned with their sustainability priorities.

Acknowledgment

We thank Gwen Jettain and Rafael Barayón for their valuable contributions to this article.

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