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The European Parliament has adopted a negotiating position that would significantly reduce corporate sustainability reporting and due-diligence obligations, backing the Commission’s “Omnibus I” simplification package and related measures.
The vote, held in Brussels on 13 November, secured a majority of 382 to 249 in favour and forms part of a broader drive to cut red tape and boost competitiveness.
Omnibus I, presented by the European Commission in February 2025, amends three pillars of the EU’s corporate sustainability framework: the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD/CS3D) and the EU Taxonomy Regulation. The Commission projects more than €6 billion in administrative relief as a result of the package, arguing that it will simplify EU rules, free resources for investment and improve the business environment in Europe.
The Parliament’s position goes beyond the original Commission proposal in several areas. For sustainability reporting, MEPs backed higher thresholds under the CSRD, so that only companies with more than 1,000 employees would be subject to mandatory reporting, up from the original threshold of 250 staff. Analysts estimate that around 80% of companies that had been preparing to report under CSRD will fall out of scope, though they may continue to publish information on a voluntary basis.
On corporate due diligence, the Parliament endorsed a narrower application of CSDDD. The revised approach would limit mandatory due-diligence duties to very large companies with at least 5,000 employees and annual turnover of €1.5 billion, considerably above the figures foreseen in earlier drafts. Due-diligence obligations would focus mainly on direct, tier-one suppliers, with more limited responsibilities further down the value chain and less frequent assessments. The proposal also removes harmonised EU-level civil liability, leaving remedies and sanctions largely in the hands of national authorities.
For the EU Taxonomy – the classification system for sustainable activities – the Parliament supports restricting mandatory alignment reporting to the largest companies, again broadly mirroring the revised CSDDD scope. Smaller entities would be able to report voluntarily under a simplified regime, with reporting templates cut back substantially compared with the current framework.
Supporters of Omnibus I within the Parliament and the business community frame the vote as a necessary recalibration of the sustainability rulebook. They argue that the original reporting and due-diligence regime risked overwhelming smaller and mid-sized companies with complex requirements and high compliance costs, diverting management time from investment and innovation. BusinessEurope, among others, has described Omnibus I as an “important first step” towards reducing regulatory burdens, while professional services firms highlight the potential for simpler, more targeted reporting obligations.
Critics, including civil-society organisations and academic commentators, take a different view. The European Coalition for Corporate Justice (ECCJ) has described the overall Omnibus approach as “full-scale deregulation designed to dismantle corporate accountability”, warning that limiting due-diligence duties to direct suppliers could leave serious human-rights and environmental risks at the bottom of global supply chains unaddressed. A press statement from ECCJ on the Parliament’s vote on Omnibus I portrays the outcome as the result of intense lobbying and a realignment in the chamber, with the centre-right European People’s Party (EPP) forming a majority with far-right groups to secure the package.
Courthouse News reports that the compromise exempts more than 80% of European businesses from supply-chain sustainability rules, following months of lobbying by energy and industrial companies. Environmental and human-rights NGOs argue that, taken together, the higher thresholds, weaker liability provisions and reduced scope of due diligence amount to a step back from the EU’s earlier commitments under the Green Deal and its human-rights policy. Separate analysis by compliance specialists notes that the “simplification” label masks a substantial scaling-back of obligations, and suggests that financial markets may receive less standardised information on companies’ social and environmental impacts.
The vote also reflects shifting political dynamics in the new Parliament. Earlier in the autumn, MEPs rejected a more limited compromise on Omnibus I, but the latest ballot has produced a clearer majority behind a more far-reaching rewrite. According to parliamentary sources and media reports, the EPP’s decision to break with some of its traditional partners and seek support from groups to its right was decisive in forming the new majority.
The Council agreed its own position on elements of the simplification agenda in June, opening the way for inter-institutional negotiations. With the Parliament’s vote now in place, trilogue talks between the Parliament, Council and Commission are expected to begin later in November, with EU institutions aiming to reach an agreement by the end of 2025.
