EU Proposes Major Environmental Reporting Reforms

The European Commission has announced a wide-ranging set of proposals to simplify environmental and sustainability reporting requirements across the European Union. Introduced under the Omnibus I simplification package, the reforms aim to reduce administrative complexity, enhance EU competitiveness, and generate up to €775 million in annual savings for businesses and public authorities

The proposals span multiple regulatory frameworks, including sustainability reporting, due diligence obligations, waste management, industrial emissions, and environmental permitting procedures.

Importance of the Proposals:

Over the past decade, EU environmental and ESG legislation has expanded significantly, notably through the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). While these measures strengthened transparency, many companies—particularly those operating across multiple Member States—have raised concerns about overlapping obligations, rising compliance costs, and administrative inefficiencies.

The Omnibus I package, proposed in February 2025, seeks to rebalance these requirements by narrowing scope, simplifying reporting content, and digitizing compliance processes, while maintaining core environmental protections

Key Elements of the Proposed Reforms

1. Corporate Sustainability Reporting (CSRD)

The scope of CSRD obligations would be significantly reduced:

• Mandatory reporting would apply only to companies with more than 1,000 employees and annual turnover above €450 million
• Smaller companies would be exempt from mandatory sustainability reporting
• Non-EU companies will fall under CSRD only if they generate over €450 million in EU revenue
• Reporting content would be simplified, with sector-specific standards becoming voluntary
• Smaller suppliers would be protected from excessive ESG data requests from larger business partners

Impact: Up to 80–90% of companies originally in scope could be removed, substantially reducing reporting burdens for SMEs and mid-sized firms

2. Corporate Sustainability Due Diligence (CSDDD)

Key changes include:

• Due diligence obligations limited to very large companies with over 5,000 employees and €1.5 billion in turnover
• Certain proposed requirements, such as binding climate transition plans, would be removed or scaled back
• Compliance timelines extended, with obligations applying from 2029

These changes aim to reduce regulatory pressure while allowing large companies additional preparation time

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Environmental Reporting Reforms Beyond CSRD and CSDDD

1. Extended Producer Responsibility (EPR) & Waste Reporting

• Removal of the requirement to appoint authorised representatives in each Member State
• Harmonised annual reporting frequency across waste streams such as packaging and batteries
• Estimated savings: ~€300 million annually

2. Industrial Emissions Directive (IED)

• Proposed simplifications include:
• A single Environmental Management System (EMS) covering multiple installations
• Removal of obligations such as chemical inventories, transformation plans, and EMS audits
• Extended compliance deadlines (e.g., from 2027 to 2030)
• Estimated savings: ~€100 million per year, including one-off cost reductions

3. Sector-Specific Reporting Relief

• Livestock and aquaculture operators may be exempt from detailed resource-use reporting if data is already collected at national level
• Backup generator operators, including data centres, would benefit from extended emissions monitoring intervals
• Estimated savings: ~€73 million annually

4. Environmental Assessments & Permitting

The Commission also proposes:

• Binding timelines for environmental assessments
• Single points of contact for permit applications
• Coordinated assessments across multiple EU directives
• Mandatory digital submission and tracking systems
• Priority permitting support for SMEs

Estimated savings: ~€180 million per year

Overall Impact

Combined, these measures are expected to deliver €775 million in annual savings by eliminating redundant reporting, harmonising compliance obligations, and accelerating permitting processes. The reforms represent one of the most significant recalibrations of EU sustainability and environmental regulation since the introduction of CSRD

Policy Debate & Next Steps

While industry groups have broadly welcomed the proposals, some stakeholders have raised concerns about potential reductions in transparency and environmental accountability. EU policymakers continue to balance sustainability objectives with competitiveness as the legislative package moves toward final adoption.

Formal publication in the EU Official Journal is expected following final approval by the European Parliament and the Council, with phased implementation to follow.

Source: EU Cuts Environmental Reporting Burden