This week’s EU Omnibus developments
A rundown of who’s been saying what over the Easter fortnight, and what more we know about plans to revise Europe’s sustainability rules
EU policymakers didn’t slow down for the Easter fortnight, with a series of big steps forward on the omnibus package.
Delays have become official
The ‘stop-the-clock’ proposal was published in the Official Journal on April 16th, meaning delays to the Corporate Sustainability Due Diligence Directive (CS3D) and Corporate Sustainability Reporting Directive (CSRD) are now formally in place.
Member States have until the end of the year to transpose the new application dates into national law.
MEPs turn attention to rule changes
That means all eyes are now on the second Commission proposal: the one outlining substantive changes to the legal texts.
Parliament has assigned responsibility for that file to its legal affairs committee, JURI, which met for the first time on Wednesday to discuss it.
At the debate, rapporteur Jörgen Warborn, from the centre-right EPP party, mooted the possibility of raising the thresholds for both CSRD and CS3D further, so that ever fewer companies were captured.
The Swedish MEP also called for a rethink of transition plans requirements, and insiders say they expect the EPP to push for the removal of all obligations regarding transition plans.
Right-leaning committee members continued to call for the whole sustainability agenda to be scrapped, or at least made voluntary and significantly delayed.
On the left, MEPs argued that the Commission’s plan to leave the civil liability component of CS3D to individual Member States would make it more complicated for companies, who need a single set of rules to follow.
There was also pushback against the plan to limit CS3D to Tier One suppliers, and a call for simplified auditing rules under CSRD.
According to JURI’s official timeline, it will present a draft report in June, which will be negotiated internally before a committee vote in October. It will then go swiftly to a Parliament-wide vote, at which point they will be ready to enter negotiations with Council and Commission.
Developments at Level 2
Spokespeople for the Commission were also at this week’s parliamentary debate, where they “emphasised” the fact the reporting rules were already being further simplified at Level Two, through the ongoing revision of the European Sustainability Reporting Standards (ESRS) and upcoming clarifications on auditing.
On Friday, Commission advisors at EFRAG agreed to a workplan for providing their recommendations on the simplification of the ESRS, which you can read about here.
Council develops position
The Council of the EU has also been busy discussing its plans for the future of the omnibus.
Just before Easter, a draft of its current position was circulated, based on a round of meetings and written comments from Member States.
The draft, discussed for a second time in a closed-door meeting on Friday, indicates that Council will stick closely to what the Commission has proposed, but there are a few key points of divergence.
It contains new permissions for Member States to suspend CSRD requirements in 2026, including for first-wave companies that would fall out of scope further down the line if the proposals were implemented.
Council also wants a clearer definition of “plausible information” in CS3D. That’s the phrase the Commission uses to describe instances in which a company would be required to conduct due diligence beyond its Tier One suppliers under the Directive (when there is “plausible information”).
Commission faces ombudsman
The Commission is facing a formal complaint over its handling of the omnibus, from civil society.
Eight NGOs including Client Earth and the European Coalition for Corporate Justice have filed a case with the European Ombudsman, accusing the Commission of taking an “undemocratic, untransparent and rushed” approach to its proposal.
ECCJ said the process had allowed “a small group of industry interests to take control and push for the deregulation of key sustainability laws”.
The Ombudsman must now decide whether to open an official investigation.