EU’s Next Move: Brussels Proposes Second Omnibus to Limit Sustainable Reporting Scope

Brussels agrees on less sustainable regulation. In mid-week, the European Parliament managed to reach a position agreement with the European People’s Party, the largest party in the European Parliament, and the Party of European Socialists, the second largest party, on a second Omnibus package. The main change concerns the rule on sustainable reporting.

In this cut, advanced by Reuters, one of the main changes is to apply the Corporate Sustainability Reporting Directive (Csrd) only to companies with 5,000 or more employees and a minimum turnover of 1,500 million euros. In its initial text, the regulation included companies with more than 1,000 employees and a turnover of more than 450 million euros.

The law is expected to enter into force in 2027, after the European Parliament approved a postponement of the law’s application dates back in April. The rule then got a two-year extension, while the other affected directive, known as Due Diligence, was extended by one year in its application.

The law will come into force in 2027, after the European Parliament approved a postponement.

The due diligence rules are focused on obliging companies to mitigate their negative impact on people and the environment in their value chain, i.e. beyond their direct scope of action. Member states have until July 26, 2027 to transpose them into national legislation.

This is another step backwards for the European Union in the area of sustainability. At the end of June, the European Commission also announced that it was withdrawing its legislative proposal aimed at combating the possibility of companies making misleading claims about the environmental qualities of their products.

The cancelled directive focused on explicit environmental claims, those expressed in text form or contained on an environmental label, and environmental labels. The aim was to establish minimum requirements for the substantiation, communication and verification of claims.

The text agreed between the European Parliament and the two main EU forces must now be put to a vote in the Legal Affairs Committee and a vote in the plenary of the European Parliament, with the text to be negotiated by the end of the year.