Omnibus initiative: EU Commission aims to consolidate ESG reporting obligations

The European Commission aims to consolidate current and future ESG reporting obligations to cut red tape for companies and ensure Europe stays competitive.

In future, companies required by the CSRD to report on sustainability could see their reporting obligations reduced significantly. On 8 November 2024, the European Council presented the Budapest Declaration on the New European Competitiveness Deal; in section 4 it calls for a drastic reduction in reporting obligations. The European Commission is expected to submit concrete proposals on reducing reporting requirements by at least 25% in the first half of 2025.

Omnibus Regulation

The aim of the initiative is to drastically cut the administrative burden, especially in relation to redundant and overlapping reporting obligations from the Corporate Sustainability Reporting Directive (CSRD, Directive (EU) 2022/2464), Corporate Sustainability Due Diligence Directive (CSDDD, Directive (EU) 2024/1760) and EU Taxonomy Regulation (Regulation (EU) 2020/852). The plan is to combine the current and future ESG reporting obligations in an “Omnibus” Regulation, while retaining the content of the statutory rules on reporting obligations.

Context

The CSRD requires companies to prepare a sustainability report and ought to have been transposed into German law by 6 July 2024. However, due to the current government crisis the timing of implementation is uncertain (see our report).

The CSDDD introduced by the European Union obliges companies to identify, mitigate and report on the impact of their business and supply chains on human rights and the environment. This obligation is aimed mainly at companies in high-risk industries.

The EU Taxonomy Regulation describes a framework for defining “green” or “sustainable” business activities to apply throughout the European Union as there was previously no clear classification of green, sustainable or environmentally friendly activities.

Conclusion and outlook

The European Commission’s planned consolidation of ESG reporting obligations aims to tangibly reduce the burden on companies without changing the content of the requirements. The Omnibus Regulation is intended to create a harmonised, more efficient framework which reduces redundant provisions in particular. Concrete proposals are expected in the first half of 2025, but there may still be changes during the procedure.

 

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