Sustainability regulations in the European Union are in the spotlight with proposals underway to amend the regulations under the EU Green Deal to streamline requirements and reduce the burden on companies and investors.
What Does the Omnibus Package Include?
The European Commission is currently in discussions regarding the proposed Competitiveness Compass, introduced January 25, 2025, which may significantly impact regulations including CSRD, CSDDD (CS3D), CBAM and SFDR1. The Proposal is part of a broader EU effort to “regain competitiveness and secure sustainable prosperity.” The goal is to reduce EU reporting obligations for all companies by 25% and for Small and Medium Enterprises (SMEs) by 35% with a new category to be created for companies that are “larger than SMEs but smaller than large companies” (so-called “small mid-caps”). There is also speculation that there may be changes to the phase in dates, reporting requirements and the in-scope designations of companies for CSRD.
1 Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD/CS3D), Carbon Border Adjustment Mechanism (CBAM) and Sustainability Financial Disclosure Regulation (SFDR).
What is the Timeline?
The initial Omnibus package was expected to be finalized on February 26, 2025, but it is now being reported that it may be delayed until at least March. Then the EU will need to finalize the deal within the EU’s legislative process which may take some time.
It is important to note that over 20 EU Member States have already transposed into law the existing EU directives, alignment to the directives may vary across Member States and there is no current directive to revoke the laws as they exist currently. Companies and investors that may need to comply with Member State laws will need to keep a close eye on how to proceed based on current obligations.
Next Steps
While we wait to see what the Omnibus package includes, TRC recommends reviewing progress of any work undertaken to date with your sustainability team (including legal advisors, auditors and consultants), to ensure that you are a good position to determine next steps once the final directives are released.
If you would like to discuss what this may mean for your business, please get in touch.
