"What Omnibus?"
Changes in European Union regulations significantly impact business operations. In this blog post, we examine what ‘omnibus’ means and how the Sustainability Omnibus Package aims to improve the EU’s competitiveness.
The concept of omnibus and its significance
The term “omnibus” occasionally appears in the news when reporting on changes related to European Union regulations. The omnibus concept refers to legislative reform where multiple regulations affecting the same subject area are reviewed simultaneously, as the legislator aims to simplify, streamline, lighten, or expedite regulation (1). The need for reforming sustainability regulations, for example, arises from the fact that over half of the EU’s SMEs cite legislation and the administrative burden it brings as the biggest obstacle to innovation (2). Recent increased reporting requirements related to responsible business practices and the need to identify risks in the value chain have added pressure on companies. Omnibus is not a legislative instrument but a term used mainly in the context of political guidance to describe a comprehensive review of regulations.
Contents of the Sustainability omnibus package
Currently, the media is discussing the Sustainability Omnibus Package published by the European Commission on February 26, 2025, which targets changes to the Corporate Sustainability Due Diligence Directive published last spring 2024, the Corporate Sustainability Reporting Directive that came into force in January 2023, as well as the taxonomy regulation and the EU’s carbon border adjustment mechanism CBAM.
The goal of the reporting regulations is to compel companies to produce information related to their sustainability actions, i.e., indicators of their activities for stakeholders. This creates a framework for business management, as companies begin to emphasize activities related to these indicators.
The Corporate Sustainability Due Diligence Directive and the deforestation regulation represent due diligence regulations, which aim to require companies to identify the harms related to their activities, plan and implement appropriate measures to prevent and mitigate these harms if they cannot be completely prevented. Although the regulations set minimum requirements for companies engaged in international trade within the scope of the regulations, the requirements of the Corporate Sustainability Due Diligence Directive are defined flexibly and not in detail: companies must take “appropriate measures” to avoid or mitigate the aforementioned risks.
Improving EU competitiveness
To understand the timing of the Sustainability omnibus package, it is good to recall the lengthy legislative process of the European Union: Firstly, the approval of new laws takes an average of 19 months from the Commission’s proposal to the signing of the approved regulation. After that, new laws are implemented in member states either on time or late. Secondly, the report “The future of European competitiveness” (2024) states that the coordination of policy actions affecting EU competitiveness is inadequate compared to practices in the USA and China: Industrial strategies should combine several policy actions: tax policy aimed at promoting domestic production, trade policy punishing anti-competitive behavior, and foreign economic policy aimed at securing supply chains. Additionally, to apply practices implemented in competing countries within the EU, it would require close coordination of current fragmented national and EU actions. Since the EU’s decision-making process is slow and fragmented, the EU’s opportunities for such cooperation are weaker than those of competing superpowers (3). Without considering these background factors, the timing of the Commission’s omnibus package appears erratic.
Changes to the Corporate Sustainability Due Diligence Directive and the Corporate Sustainability Reporting Directive
With the Sustainability omnibus package, the EU Commission now aims to address the shortcomings in EU competitiveness. The key reform proposals in the package relate to the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive. The proposal aims to reduce the number of companies subject to reporting obligations by 80%, so that only companies with over 1000 employees, a turnover of over 50 million euros, or a balance sheet total of over 25 million euros would be subject to reporting obligations. For entities not covered by the directive, the EU will approve a voluntary reporting standard by delegated regulation, based on the voluntary standard for SMEs published by EFRAG (4) in December 2024. The reduction of administrative burden would affect a significant number of Finnish companies, as instead of the current approximately 1300 companies, the reporting obligation would only apply to 300 companies. Companies not subject to mandatory regulation can always voluntarily report on their sustainability actions, which can create a competitive advantage for them.
The Corporate Sustainability Due Diligence Directive, which should currently be implemented nationally by July 5, 2026, would also undergo changes. According to the existing directive, companies should consider human rights principles and environmental aspects throughout their value chain. The omnibus package considers the scope of the entire value chain too broad an obligation and therefore proposes to lighten the liability regulations to cover only direct contractual partners instead of the entire value chain. The deadlines for implementation would also be changed according to the proposal.
By simplifying regulations, the Commission aims to reduce administrative burdens for companies by at least 25% and for SMEs by up to 35% by the end of this term. The planned measures would increase the competitiveness of companies and free up additional investment capacity.
Summary
The Sustainability omnibus package aims to improve EU competitiveness by reducing the administrative burden on companies and simplifying regulations. The companies’ own willingness, rather than mandatory regulation, determines the actions they direct their resources towards. A diverse combination of guidance tools, balanced mandatory and voluntary regulation, leads towards a more sustainable and competitive European Union.
Author: Kaisa Sorsa
Sources: (1) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, COM (2025) 47 final: A simpler and faster Europe: Communication on implementation and simplification.
(2) “The future of European competitiveness”, September 2024.
(3) “The future of European competitiveness”, September 2024.
(4) EFRAG’s previous name was European Financial Reporting Advisory Group, but its official name is now simply EFRAG. It is an independent private stakeholder body, mostly funded by the EU.