Author : Noémie Voirin
A turning point for EU sustainability reporting
As Europe enters 2026, corporate sustainability reporting finds itself at a pivotal moment. The EU Omnibus package, designed to simplify key directives such as the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), has moved from proposal to political agreement. While officially presented as a measure to reduce administrative burden and support competitiveness, the package has sparked debate about the future of corporate accountability in Europe.
The Omnibus underscores a broader challenge for policymakers: balancing the need for simpler rules with the goal of robust, transparent reporting that drives meaningful action on environmental, social, and governance (ESG) issues.
Simplification for competitiveness: the official perspective
Supporters of the Omnibus argue that EU companies, particularly small and medium-sized enterprises (SMEs), have faced overlapping and complex reporting requirements that increase costs and slow investment. From this perspective, the package provides clarity and predictability, enabling businesses to focus on growth and innovation rather than administrative burden.
Jörgen Warborn (EPP, Sweden), Rapporteur of the Legal Affairs Committee, summarized this view after the December 2025 vote:
“Today’s vote shows that Europe can be both sustainable and competitive. We are simplifying rules, cutting costs, and giving businesses the clarity they need to grow, invest, and create well-paying jobs.”
Danish ministers echoed similar sentiments. Marie Bjerre described the package as:
“An important step towards our common goal to create a more favourable business environment to help our companies grow and innovate.”
Morten Bødskov added:
“For years, European businesses have faced wave after wave of red tape. This has slowed green investments and weakened our competitiveness. With clear and simple rules, companies can focus on their core business, achieve better value for money in the green transition, and strengthen their ability to grow and invest.”
For policymakers, the Omnibus represents an attempt to recalibrate regulatory ambition with economic realities, particularly for SMEs navigating increasingly complex ESG requirements.
Critics warn of reduced transparency
Despite the official rationale, the Omnibus package has not gone uncontested. NGOs, trade unions, and parts of the business community have expressed concerns that simplification could weaken corporate accountability. Critics highlight that the removal of mandatory climate transition plans under the CSDDD could hinder companies’ ability to assess climate-related and social risks across their value chains.
Julia Otten of Frank Bold commented after the vote:
“The final Omnibus agreement reflects short-sighted political decision-making. By deleting the climate transition plan implementation, the EU is weakening the key legislative frameworks for businesses to prepare for climate risks and global challenges that can severely affect their operations and value chains. This is counter-productive for businesses, weakens accountability, and jeopardises the EU’s own climate and industrial objectives.”
ClientEarth and other civil society organisations continue to emphasize the importance of maintaining robust reporting frameworks to ensure corporate responsibility and protect human rights and environmental standards. Their stance underscores the ongoing tension between reducing regulatory complexity and maintaining meaningful, transparent ESG disclosure.
What the Omnibus changes for companies
The Omnibus package adjusts key reporting thresholds, narrows obligations for some SMEs, and modifies timelines. Before the reform, many EU companies had to report if they met two of three criteria: more than 250 employees, turnover over €40 million, or a balance sheet above €20 million, and non-EU companies with over €150 million in EU turnover were also included. Now, CSRD obligations primarily apply to EU companies with more than 1,000 employees and net turnover above €450 million, while certain financial holding companies may qualify for exemptions. Under the CSDDD, large companies — including non-EU entities with substantial EU turnover — remain subject to due diligence requirements, though the publication of climate transition plans is no longer mandatory.
Simplifications to the EU Taxonomy Regulation, alongside upcoming simplified ESRS standards, provide clearer guidance on reporting expectations. Core principles, such as double materiality, remain intact. In practice, the Omnibus changes how and when companies report, rather than eliminating the obligation to understand and disclose ESG impacts, risks, and dependencies.
Turning reporting into impact in 2026
The Omnibus package may simplify reporting, but proactive companies can turn ESG insights into strategic advantage. Practical steps include:
- Understand your impacts — start with a carbon footprint or broader ESG assessment to identify where your operations and supply chain have the greatest environmental and social effects.
- Use insights to guide strategy — let the data inform investments, operations, and supply chain decisions, rather than relying solely on compliance-driven approaches.
- Engage stakeholders transparently — communicate your progress and priorities clearly to investors, clients, and partners.
- Iterate and improve — regularly update assessments and strategy as new data and opportunities arise.
By taking these steps, companies not only meet reporting expectations but also transform ESG insights into tangible action in 2026, strengthen resilience, and build stakeholder trust — shaping a sustainable future on their own terms. Start today — expert guidance is available to turn insights into action and make your sustainability journey practical and impactful.
Learn more and take action: www.e-a.earth | contact@e-a.earth
Sources
https://finance.ec.europa.eu/news/omnibus-package-2025-04-01_en?prefLang=et
https://www.clientearth.org/latest/press-office/press-releases/lawyers-condemn-the-omnibus-proposal
https://www.clientearth.org/latest/documents/joint-statement-against-the-omnibus-proposal
https://www.theguardian.com/world/2025/dec/16/green-groups-eu-betrayal-vote-reduce-oversight-firms