Berlin, 26 February 2025 – With the first ‘omnibus package’ published today, the EU Commission is presenting a far-reaching proposal to simplify and harmonise existing corporate reporting obligations in Europe. The declared aim is to reduce the bureaucratic burden on companies and improve the coherence of the requirements from the Sustainability Reporting Directive (CSRD), the Due Diligence Directive (CSDDD) and the Taxonomy Regulation.
‘The changes proposed in the omnibus package published today are a step in the right direction,’ says Johannes Kröhnert, Head of Brussels office at the TÜV Association. ‘At the same time, there is also a risk of overshooting the targets. The objective originally set with the sustainability regulations - more climate protection and fewer human rights violations - must not be watered down. ‘With the first Omnibus package, the EU Commission is responding to massive criticism from the business community that the bureaucratic burden on companies is too high.
‘We welcome the fact that the omnibus guidelines are primarily aimed at improving consistency within the various reporting obligations. The bundling of reporting obligations in line with the ‘once-only’ principle offers considerable potential for saving corporate resources and avoiding duplicate reporting,’ says Kröhnert. The proposed postponement of the CSRD and the CSDDD also gives companies the necessary time to establish internal structures and prepare comprehensively for the new requirements.
However, the proposed amendments to the CSRD would drastically restrict the scope of the directive. Instead of applying to companies with more than 250 employees, the CSRD would now only apply to companies with 1,000 employees or more. This would reduce the number of companies covered by up to 85 per cent. ‘If the proposed amendment is implemented, the CSRD would not only apply to significantly fewer companies than originally planned. It would also fall behind its predecessor, the Non-financial Reporting Directive, which applied to companies with more than 500 employees. I see a major risk here that the original goal of comprehensive transparency on the sustainable management of companies will be missed.’
Under the CSDDD, the future assessment of due diligence obligations in the value chain is to be limited to direct suppliers only. ‘An effective supply chain due diligence legislation should address risks along the entire value chain. The areas where human rights and environmental violations typically occur are the lower levels of the supply chain. It must therefore be ensured that these violations continue to be recorded,’ says Kröhnert. It is also important that companies that have already established more comprehensive due diligence obligations do not suffer any competitive disadvantages.
The fact that there are no standardised European guidelines on who is allowed to assess sustainability reports has not yet been taken into account. According to the CSRD, sustainability reports must be independently verified in the same way as financial reports. To date, EU member states have to decide whether so-called independent assurance service providers should be accepted in addition to auditing firms. This, in turn, leads to a patchwork and an artificial scarcity of the verification market. In view of the TÜV Association, the EU legislator should therefore provide for the Europe-wide opening of Independent Assurance Service Providers as part of the Omnibus package. ‘A broad verification market reduces costs for companies, utilises the expertise of technical experts and prevents competitive disadvantages within the EU. Assessment organisations such as the TÜV companies have already been active in the auditing of sustainability reports for years and have the relevant expertise,’ says Kröhnert. In Germany, a broad majority of companies and trade associations are calling for the verification market to be opened up.
The Omnibus package published today will now be reviewed by EU member states and the EU Parliament, amended if necessary and then adopted. Omnibus regulations are legislative proposals that amend various EU legal acts in a bundled manner and thus enable the simultaneous amendment of several legislations.