How will EU Omnibus Package Approval Impact Businesses?

The European Parliament has voted to approve the Omnibus Package, a move designed to simplify reporting and due diligence for businesses in the EU.

The package introduces major reforms to sustainability legislation. It scales back the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).

Both directives are key components of the European Green Deal, which is the bloc's primary framework for climate action.

Key changes to CSDDD and CSRD

The changes to the CSDDD are substantial. The directive will now apply to fewer companies, with the threshold rising to firms with over 5,000 employees and €1.5 billion in annual turnover. 

This reduces the scope to around 1,600 companies.

Key obligations such as implementing climate transition plans have been removed. Maximum penalties are lowered to 3% of global turnover and the new rules will not be enforced until July 2029.

The CSRD’s scope is also reduced, which the European Coalition for Corporate Justice says will see the directive “gutted”.

Reporting will now only be required for companies with more than 1,000 employees and a turnover above €450m (US$526,9m). This change could exclude about 90% of companies previously covered by the directive.

Lobbying and transparency concerns

The lead-up to the vote was marked by accusations of undue influence from energy lobbyists.

ExxonMobil CEO Darren Woods told Reuters that the original directives would be detrimental to his business. 

He said: "What's astounding to me is the overreach not only requires us to do that for the business that we're doing in Europe but it would require me to do that for all my business around the world, irrespective of whether it touches Europe or not.”

Similarly, QatarEnergy CEO Saad al-Kaabi indicated to Reuters that the company might cease EU operations if the package did not pass: "We can't reach net zero and that's one of the requirements among other hosts of things. Europe needs to understand that I think they need the gas from Qatar. They need gas from the US."

The legislative process also faces scrutiny. On 15 December, Transparency International EU filed a complaint against Jörgen Warborn, alleging a potential conflict of interest.

“It is deeply alarming to witness how foreign pressure shapes a file that should have been based on evidence and by the needs of those facing the impacts on the ground,” said Nele Meyer, Director at the European Coalition for Corporate Justice.

“While the protections have been weakened, the core due diligence duty remains. Now the law must be implemented in a way that delivers real protection for people and the planet.”

Stakeholder and political reactions

The decision prompted varied responses. Eve Geddie, Director of Amnesty International’s European Institutions Office, expressed concern at the decision: “In a rush to close the deal in Strasbourg just days before the winter break, MEPs voted through a sweeping deregulation package that undermines vital climate and human rights safeguards, betraying people and the planet at a time when protections are needed most.

“By limiting the due diligence law to only the very largest corporations, the EU is effectively excluding most companies from meaningful accountability, leaving workers, communities and ecosystems without protection and sending a worrying signal that corporate interests are being placed above human rights," she adds.

In contrast, some political figures have welcomed the vote. “This is an important step towards our common goal to create a more favourable business environment to help our companies grow and innovate,” says Marie Bjerre, Danish Minister for European Affairs.

Jörgen Warborn, a European Parliament rapporteur, calls the outcome a positive development for European businesses, saying: “Parliament has listened to the concerns expressed by job creators across Europe.

“Backed by a broad majority, today’s vote delivers historic cost reductions while keeping Europe’s sustainability goals on track. This is an important first step in the ongoing efforts to simplify EU rules.”

Final steps and the path forward

Once formally adopted by the Council, the changes will enter into force 20 days after publication in the EU Official Journal. Member states will have until 2028 to transpose the directive into national law.

This package is the first phase of a wider deregulation agenda. The Commission has already presented a new environmental simplification package aiming for €11 billion in savings.

Eve Geddie says: “EU governments must strengthen key provisions when they incorporate these regulations in national law and use every available avenue to improve protections."