EP adopts negotiating position on Omnibus sustainability package

The European Parliament (EP) has announced it has adopted its negotiating mandate on the Omnibus I sustainability package which proposes targeted amendments to, amongst other things, the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D), aimed at reducing administrative burdens for businesses. The EU has already published Directive (EU) 2025/794 which implemented the "stop-the-clock" proposal, postponing the application date of aspects of CSRD and CS3D.

It follows the EP's rejection of the mandate proposed by its Legal Affairs Committee just last month. Although the text of the mandate has not been published, the announcement states that the mandate proposes sustainability reporting will only apply to companies with over 1,750 employees and annual turnover exceeding EUR450 million, with simplified standards and voluntary sector-specific disclosures. Only businesses within this scope would also be required to provide sustainability reporting under taxonomy rules (i.e. a classification of sustainable investments).

Due diligence obligations will be limited to large corporations with more than 5,000 employees and turnover above EUR1.5 billion, focusing on a risk-based approach rather than systematic data requests from smaller business partners. Transition plans aligned with the Paris Agreement will no longer be mandatory, and liability for non-compliance with due diligence requirements will be enforced at the national level rather than EU level. The EP also requests the European Commission to establish a new EU digital portal to provide free templates and guidance on all EU reporting requirements complementing the European Single Access Point. The Council of the EU had adopted its negotiating mandate in June. Negotiations between both European bodies will begin on 18 November, with legislation expected to be finalised by the end of year.

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