EU Omnibus I Package Eases Sustainability Reporting Rules

Overview

On 9 December 2025, the European Commission, the European Parliament and EU Member States reached a political agreement on the Omnibus I Simplification Package. The initiative aims to streamline sustainability reporting and corporate due diligence obligations, reducing regulatory complexity for businesses operating across the EU.

The package introduces targeted amendments to key EU corporate sustainability legislation, with the objective of cutting compliance costs, improving legal clarity and strengthening EU industrial competitiveness, while maintaining core environmental and human-rights safeguards.

What Is the Omnibus I Simplification Package?

The Omnibus I Package revises and simplifies requirements under two major EU sustainability frameworks:

• Corporate Sustainability Reporting Directive (CSRD)
• Corporate Sustainability Due Diligence Directive (CSDDD / CS3D)

It forms part of a broader EU regulatory agenda to reduce administrative burdens by approximately 25% overall and up to 35% for small and medium-sized enterprises (SMEs).

Changes and Simplifications

1. CSRD: Narrowed Reporting Scope

• The scope of CSRD has been significantly reduced, removing a large number of companies from mandatory sustainability reporting.
• Updates to the European Sustainability Reporting Standards (ESRS) reduce the number of required data points and simplify disclosures.
• Companies remaining in scope are expected to benefit from lower reporting costs and reduced complexity.

2. CSDDD: More Targeted Due Diligence

• Due diligence obligations across global value chains have been streamlined.
• Core environmental and human-rights objectives are retained, while documentation and reporting requirements are simplified.
• The changes improve predictability and proportionality, particularly for smaller companies.

3. Cross-Industry Impact

• The reforms apply across sectors subject to EU sustainability rules, including manufacturing, chemicals, energy and consumer goods.
• Smaller suppliers and downstream partners face fewer administrative and data collection demands.

Business Implications

For industry stakeholders, the agreement delivers several tangible benefits:

• Reduced compliance burden through simplified reporting and due diligence processes
• Cost savings driven by narrower scope and fewer disclosure requirements
• Greater legal certainty with clearer and more consistent obligations across Member States
• Enhanced competitiveness, as the EU seeks to balance sustainability ambition with economic resilience

Next Steps and Timeline

• The European Parliament has approved the provisional agreement following a mid-December vote.
• The EU Council is required to complete the legislative process.
• Once published in the Official Journal of the European Union, the amendments will enter into force on the date of publication.
• Member States will then begin transposing the changes into national law, with transitional periods expected to extend into 2028–2030.

Why does this matter?

The Omnibus I Simplification Package signals a strategic shift in EU sustainability policy, moving from broad regulatory expansion toward greater efficiency, proportionality, and business alignment. It seeks to preserve key environmental and human-rights objectives while making compliance more manageable for companies operating in complex global value chains.

Takeaways for Stakeholders

For compliance teams:

• Review whether the organisation remains in scope under revised CSRD thresholds
• Update reporting processes in line with simplified ESRS requirements
• Adjust due diligence frameworks to reflect clearer CSDDD expectations
• Monitor EU and national implementation timelines closely

For investors and advisors:

• Expect changes in the scope and depth of sustainability disclosures
• Reassess data-collection, materiality and comparability assumptions
• Prepare for transitional impacts on ESG reporting consistency across jurisdictions

Source: Commission welcomes political agreement on Omnibus I simplification package