News Flash: The European Commission’s "Omnibus Simplification Package"

What You Need to Know


The European Commission is preparing an "Omnibus Simplification Package" to address widespread concerns about the regulatory burden on businesses under the EU’s sustainability framework. Announced by Commission President Ursula von der Leyen in November 2024, this initiative seeks to reduce redundancies and streamline reporting requirements and due diligence obligations.

Key Aspects of the Omnibus Package:

  1. Goals:

The Omnibus Simplification Package aims to streamline the EU's sustainability reporting and due diligence frameworks. This initiative, announced by European Commission President Ursula von der Leyen in November 2024, is expected to focus on eliminating overlaps and contradictions across three key directives:

  • Corporate Sustainability Reporting Directive (CSRD)

  • Corporate Sustainability Due Diligence Directive (CS3D or CSDDD)

  • EU Taxonomy Regulation

The package seeks to reduce the regulatory burden on businesses – especially small and medium-sized enterprises (SMEs).

  1. Drivers of Change:

  • Regulatory Overlap: Existing sustainability frameworks – the CSRD, CS3D, and EU-Taxonomy Regulation – have overlapping and redundant reporting requirements, creating unnecessary complexity.

  • Draghi Report: Mario Draghi’s 2024 report, The Future of European Competitiveness – A Competitiveness Strategy for Europe, highlighted that 60% of EU companies view regulation as an obstacle to investment, with 55% of SMEs flagging regulatory obstacles and administrative burdens as their greatest challenge.

  • Following the findings of the Draghi Report on 8 November 2024, the European Council released the Budapest Declaration on the New European Competitiveness Deal. This initiative triggered a commitment towards a smart, clear regulatory framework that reduces administrative burdens, particularly for SMEs. The declaration emphasized building trust and fostering a supportive business environment. Key goals include cutting reporting requirements by at least 25% in the first half of 2025 and integrating red-tape and competitiveness impact assessments into EU proposals.

  • Stakeholder Pressure: Member States like Germany and France have advocated for delayed compliance deadlines, reduced data requests for SMEs, and increased thresholds for reporting obligations.

  1. Next Steps:

  • 21 January 2025: The omnibus proposal will be discussed as an agenda item at the Economic and Financial Affairs Council (ECOFIN) meeting of European finance ministers.

  • 26 February 2025: The European Commission is scheduled to discuss its legislative proposals for the Omnibus Simplification Package.

  • Legislative Process: The package will be reviewed by the European Parliament and Council, with no clear timeline for final adoption.

 

 

Authors

Dr. Anna Wolf-Posch, LL.M. 

Partner

Anna.Wolf-Posch(at)cerhahempel.com

+43 1 514 35 581

 

Mag. Jovan Mitic

Associate

Jovan.Mitic(at)cerhahempel.com 

+43/1/514 35-587

 

Stay tuned—more to come!