The EU’s chief Ombudsman has issued an extraordinary rebuke to the European Commission, accusing it of bypassing critical scrutiny in its haste to roll back key environmental reporting obligations — a move that critics say risks undermining the bloc’s climate credibility.
Emily O’Reilly, who has held the office of Ombudsman since 2013, has written formally to Commission President Ursula von der Leyen requesting an explanation as to why the executive chose to accelerate proposals to weaken corporate sustainability reporting rules without the standard public consultation or impact assessment process.
The proposed changes, which would sharply reduce the number of companies required to disclose climate-related and social risks under the EU’s Corporate Sustainability Reporting Directive (CSRD), were announced in June as part of a wider package aimed at “cutting red tape” for small and medium-sized enterprises. But green groups and governance experts fear it signals a dangerous retreat from hard-won environmental standards.
“This is not just about technical process — it’s about transparency, accountability, and the Union’s broader commitments to sustainability,” said Ms O’Reilly. “The absence of a proper impact assessment raises serious questions about how such a far-reaching proposal could be tabled with such speed and so little justification.”
The Ombudsman’s request, made public on Monday, asks the Commission to clarify whether it considered conducting a full regulatory impact assessment (RIA) and whether any internal dissent was raised before the deregulation plan was announced. The move marks a rare but significant intervention by an official whose remit is to protect the principles of good administration across EU institutions.
Under the proposed revision, the number of companies required to submit full sustainability reports would fall by as much as 75%, excluding thousands of mid-sized businesses from detailed disclosures on emissions, biodiversity impact, supply chain practices, and gender pay equity.
The Commission insists that the reform is necessary to ease the bureaucratic burden on businesses still reeling from energy shocks and inflation. But critics see it as a rushed political concession to centre-right parties and business lobbies emboldened by gains in the last year’s elections — and a worrying sign of the European Green Deal’s unraveling.
“This is deregulation by stealth,” said one MEP. “When a Commission that just spent five years pushing for sustainable finance starts scrapping its own standards overnight, you know politics have changed.”
Indeed, the speed of the proposal’s rollout — bypassing the public consultation process normally required under the Better Regulation guidelines — has raised eyebrows even within Commission circles. One senior official, speaking on condition of anonymity, described the process as “truncated and politically charged.”
“Normally, a deregulatory change of this scale would involve months of consultation, stakeholder input, and cross-service review,” the source said. “Instead, it was pushed through in a matter of weeks, with instructions coming from the very top.”
The European Parliament’s Legal Affairs Committee (JURI), which oversees corporate governance and reporting standards, has already flagged procedural concerns and may yet call Commission officials to testify. Meanwhile, environmental NGOs are warning that the rollback could trigger a domino effect in other policy areas, from green taxonomy to due diligence laws.
“If the Commission weakens reporting rules, it will be much harder to track whether companies are meeting climate targets,” said Stefania Pizzoli of Climate Watch Europe. “Investors rely on this data, consumers rely on it, and regulators rely on it. Scrapping it for convenience is not just irresponsible — it’s incoherent.”
The timing is also politically sensitive. With the Commission preparing to shut down for its customary five-week summer recess, many believe the reform was intentionally timed to evade scrutiny. The next College of Commissioners meeting is not scheduled until early September, and national governments, many of whom are only beginning to assess the implications of the reform, are unlikely to reach a common position before the autumn.
“With EPP pressure mounting this is about appeasing the SME lobby and presenting the EU as more ‘business-friendly,’” said a former EU climate adviser. “The real losers are transparency, and long-term investor confidence.”
The Commission has not publicly responded to the Ombudsman’s letter but is expected to do so within 30 days, as per protocol. If the explanation proves unsatisfactory, Ms O’Reilly could open a formal inquiry — a step that would likely prolong the political storm well into the autumn legislative cycle.
For now, what was framed as a “technical adjustment” is shaping up to be a major policy fault line — exposing a deeper tug-of-war between green ambition and economic pragmatism. In Brussels, few are surprised.
“The pendulum always swings,” said one diplomat. “But if the EU backslides on sustainability now, just to look efficient, it risks losing both its credibility and its competitive edge. And that would be a far greater cost than any paperwork.”
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“Every euro spent on a dodgy offset in a developing country is a euro not spent on upgrading a steel plant in the Ruhr, electrifying transport networks in France, or building green innovation hubs in Eastern Europe.”
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