In a significant move to streamline sustainability reporting, the European Commission has announced plans to adapt key ESG frameworks using a single “omnibus” regulation. This initiative aims to amend the Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy Regulation, and the Corporate Sustainability Due Diligence Directive (CSDDD).
Objectives of the Omnibus Regulation
The primary goal of this consolidation is to reduce bureaucratic complexity and administrative burdens on businesses, thereby enhancing the EU’s competitiveness. By eliminating overlapping requirements, the Commission seeks to make compliance more straightforward for companies operating within the EU.
Implementation Timeline
The European Commission is expected to publish the proposed package on February 26, 2025, with further developments likely throughout the year. While the intent is to simplify compliance, the core substantive obligations of existing regulations are expected to remain intact. However, some observers fear that the legislative process could allow the Euopean Parliament and Council to reopen discussions on more fundamental changes such as the reporting content, timeline of application and companies in scope of reporting.
Stakeholder Concerns
While this initiative aims to reduce the administrative burden, some stakeholders have raised concerns. ESG professionals warn that a premature reduction of reporting requirements could disrupt ongoing preparations and compromise data integrity.
Advice for Companies
For companies currently preparing their CSRD reports, we advise staying the course. The changes introduced by the omnibus regulation are not expected to alter the substantive content of the existing frameworks. Instead, they are likely to involve minor adjustments to align legislation and simplify compliance for smaller businesses.
Wave 1 (first reporting due January 2025) and 2 firms (due January 2026), which are already gathering the data required for compliance, should continue their efforts without delay. As one expert noted, “It’s full steam ahead. Keep doing what you’re doing to the same timeline.” Any changes resulting from the omnibus regulation will likely take years to implement and may primarily affect smaller firms.
Greenomy’s Proactive Approach
As the European Commission moves forward with this consolidation, businesses should remain attentive to updates and continue their compliance efforts to align with the evolving regulatory landscape.
Greenomy’s Regulatory team is taking a proactive approach to prepare for the omnibus regulation while closely monitoring developments. Our thought leadership status allows us to actively participate in shaping the future of ESG reporting:
• Collaboration with the European Banking Federation (EBF): As a member, we are contributing to the drafting of a position paper on simplifying the Sustainable Framework package.
• Feedback to DG FISMA: Greenomy is providing input to DG FISMA, which has been exploring ESG reporting simplifications.
From a practical perspective, Greenomy’s reporting solution is designed for adaptability. By leveraging highly granular data points in line with XBRL requirements, our platform offers significant flexibility. Once the changes are finalized, this approach will enable us to swiftly integrate the new requirements, ensuring that our clients remain ahead of the curve.
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