This week’s EU Omnibus developments

The European Parliament was busy negotiating the Omnibus this week, ahead of the summer break.

The discussions didn’t yield much in the way of agreement, though.

Four committees adopted positions on the proposed changes to the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive, but they diverged significantly on key topics such as employee thresholds.

Current CSRD proposals would capture 2,800 firms

Research published this week shows that, if Council is successful in limiting the scope of CSRD to companies with more than €450m in turnover, the number covered will fall from 9,200 to 4,800.

This would be just 2,800 if the European People’s Party gets approval for its position in Parliament.

“This threshold makes the employee criterion largely irrelevant, as firms with such turnover typically have over 1,000 employees,” explained professor Andreas Rasche, co-author of the research.

The paper goes on to recommend that lawmakers should lower the CSRD’s threshold to 500 employees.

Companies with between 500 and 1,000 staff should be allowed to follow a lighter disclosure regime (without assurance requirements), it continued, while those with more than 1,000 employees should adhere to the revised European Sustainability Reporting Standards (with limited assurance).

“This would bring 6,850 companies back into CSRD scope and it controls costs,” Rasche argued.

German companies find just 25 ESG data points relevant

Elsewhere, the CFOs of German companies in the first wave of CSRD complained about the cost of compliance in a survey by Deutsche AktienInstitut (DAI), translated into English this week.

Respondents told the influential business association they’d had to allocate human resources to reporting instead of “real transformation”, which resulted in sustainability being “discredited as a bureaucratic issue and los[ing] acceptance”.

Of the 364 data points the participating companies collected on average, they found just 25 to be useful or relevant for management purposes, DAI found.

However, most companies acknowledged some benefits to sustainability reporting, with only 15% seeing no advantage to the European Sustainability Reporting Standards (ESRS).

DAI said its members wanted the Commission to adopt the International Sustainability Standards Board’s climate standard instead of ESRS E1, and “consider expanding the international standard to better align it with European requirements”.

Next steps for Parliament

The lack of consensus among MEPs this week may give JURI, the legal affairs committee in charge of the omnibus negotiations, even more influence over Parliament’s final position.

JURI is scheduled to hold further meetings in September to decide its red lines and areas of compromise, before the plenary vote expected in October.

The Commission has been ordered to explain why its inter-departmental consultations on the Omnibus were concluded within 24 hours.

The process is supposed to take 10 days, but can be fast-tracked in certain circumstances to two days.

European Ombudswoman, Teresa Anjinho, is investigating the Commission’s decision to assign “critical urgency” to the Omnibus, which also saw it bypass the usual impact assessments and public consultations.

“The Ombudswoman asked the Commission to explain why a further public consultation was not considered necessary when two meetings held in February 2025, and attended mainly by business and industry representatives, appear to have been the only stakeholder exchanges held in relation to the proposed amended legislation,” said a statement published on Monday.

“Given the importance of this inquiry and the fact that other omnibus packages are planned, the Commission has been asked to respond by 15 September 2025.”

Consultation on Environmental Omnibus looms

Those other planned omnibuses are moving forward, with the Commission preparing to launch a call for evidence on an Environmental Omnibus shortly.

First announced in May, it’s still unclear which policies will be covered by the package.

It is understood that the initial proposal will cover the Waste Electrical and Electronic Equipment Directive, the Industrial Emissions Directive, the Waste Framework Directive and the Urban Wastewater Treatment Directive.

There are also reports that the EU’s deforestation regulation will be included, following pressure from Council and Parliament last week for the Commission to simplify the law.

The Environmental Omnibus is likely to run in parallel to a Circular Economy Omnibus and an Energy Omnibus.

The Council also adopted a ‘stop the clock’ law for the EU batteries regulation on Friday, meaning companies producing and exporting batteries with have two extra years to start complying with due diligence requirements.