What is EU's Omnibus & Why Are Major Companies Against It?
A group of 11 major global organisations including DP World, Ferrero, L'Occitane, Mars, Nestlé, Primark, Signify and Unilever has written to the European Commission urging it not to weaken existing sustainability reporting standards through its upcoming omnibus package.
These eight companies, alongside NEI Investments, the Ethical Trading Initiative and the Global Network Initiative, have expressed concerns about potential changes to established frameworks that could create uncertainty in corporate sustainability reporting.
The European Commission plans to publish its omnibus package on 26 February 2025, introducing measures to streamline reporting requirements across multiple EU sustainability laws.
While aimed at reducing administrative burdens and encouraging economic growth, the initiative has sparked debate about its potential impact on key regulations including the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD).
"We at DP World want the commission not to go back on committed legislation covering supply chain due diligence (CSDDD) and reporting (CSRD)," wrote Nicholas Mazzei, Vice President for Sustainability at DP World, after the publication of the open letter.
"What we in the business world want is clear implementation guidance from the commission, and not the reopening of adopted legal texts for renegotiation."
The current regulatory landscape
The move comes amid growing pressure for regulatory simplification, with data showing that more than 60% of EU companies view regulation as an obstacle to investment. For SMEs the challenge is particularly acute, with 55% identifying regulatory and administrative burdens as their greatest challenge.
The EU's current sustainability reporting and due diligence framework has been identified as a significant source of regulatory burden, complicated by overlapping requirements and insufficient guidance for implementing complex rules. Additional challenges include “gold plating” at the national level, where Member States introduce requirements exceeding EU law, and the “trickle-down effect” where reporting burdens transfer from large companies to actors in their value chain.
"Generally, SMEs won't have a dedicated sustainability person," HubSpot's Senior Director of Sustainability, Yogesh Chauhan told Sustainability Magazine in a recent interview, speaking to the challenges smaller companies face with these regulations.
"So how do they navigate around Scope 1, Scope 2 and Scope 3 emissions? How do they calculate it? How do they develop their GHG inventory? How do they set science-based targets? It's daunting; all of these things are.
"If you're a small business that employs 10 people, that's going to be really hard work."
What are the concerns in the industry?
In their joint letter to senior EU officials, including Commission President Ursula von der Leyen and multiple commissioners, the companies emphasised their continued support for EU sustainability initiatives while warning against potential disruption. They particularly highlighted concerns about the Corporate Sustainability Due Diligence Directive, arguing it contains no overlapping reporting requirements and should remain unchanged.
They particularly highlighted concerns about the Corporate Sustainability Due Diligence Directive, arguing it contains no overlapping reporting requirements and should remain unchanged.
The businesses stressed that they have already invested significant resources in preparing for and implementing current requirements.
They argue that predictability is crucial for informed decision-making and have called for the Commission to publicly confirm that the omnibus approach will not allow agreed legal texts to be reopened for renegotiation.
"When they ask me why DP World is so focused on sustainability, the answer is easy; our customers want it," explains Nicholas.
"And they want it in a way that is consistent, against rigorous standards and easily measurable.”
International pressure
The timing of the omnibus package reflects broader international tensions, particularly with the United States.
Prior to President von der Leyen's November 2024 announcement, US lawmakers had already voiced opposition to the CSDDD's extraterritorial scope, describing it as "a serious breach of US sovereignty and a direct threat to the global competitiveness of American companies."
The European Commission's position
While acknowledging implementation challenges, the Commission has attempted to reassure stakeholders about the scope of potential changes.
President von der Leyen has stated that "the content of the laws is good, we want to maintain it and we will maintain it. But the way we get there, the questions we're asking, the data points we're collecting is too much, often redundant and often overlapping."
The response from stakeholders
The business coalition's concerns are echoed by a wider group of stakeholders.
In December 2024, more than 90 organisations representing civil society, businesses, banks and investors issued a joint statement urging the EU to improve its implementation of CSRD standards whilst maintaining the directive's robustness.