OMNIBUS package – a revolution in sustainable development?

Ursula vor den Leyen announced in early 2025 that EU sustainability and reporting regulations would be slimmed down significantly. In the days that followed, there was a declaration that a review and reduction of such EU regulations as the Sustainability Reporting Directive (CSRD), the Due Diligence Directive (CSDD), Taxonomy and a number of related regulations would ensure that they would be reduced by 25 percent as early as the first half of the year. The entire initiative has been named the OMNIBUS Package.

As an aside, it’s worth mentioning that the name is rather unfortunate, because barely 6 years ago the Omnibus Directive was adopted at the EU level. It regulates, among other things, the listing of the lowest price of products in the last 30 days. It won’t make it any easier to get information about changes in sustainability legislation.

Why do we need the OMNIBUS Package?

The idea that sparked the OMNIBUS Package has two sources. The first is very much related to a report by Mario Draghi, former president of the European Central Bank, on the competitiveness of the European economy. The 2024 document points to Europe’s declining innovation and competitiveness. The author sees one of the reasons for this in the increased bureaucratization of procedures related to, among other things, sustainable development in recent years. This also fits in with some disturbing messages from overseas.

On the other hand, the European market is very concerned about the new sustainability reporting regulations. Businesses, but also financial institutions, are putting considerable effort to prepare for ESRS-compliant reporting. Various amounts are appearing in the media space, illustrating this commitment. They even reach tens of thousands of euros. It should be made clear that the regulations adopted at the EU level are very extensive – as we are talking about thousands of pages of directives, regulations and guidelines. They are not always consistent with each other, which complicates their interpretation. Many countries, including Poland, have had and continue to have delays in implementing EU directives into national law.

What causes me great surprise is that with such incredibly expansive legislation, there are still many issues that are unclear. One example is the double materiality principle introduced by the CSRD. Even for experienced experts, this is an extremely challenging analysis, in many cases conducted without at least understanding its meaning. Necessary explanations and regulations are lacking.

On top of that, there is an audit

Things are also not made any easier by the fact that sustainability reporting is to be audited starting this year. According to the regulations, it will be carried out by the same auditors who audit companies’ financial statements. They did get expert support, but the onus and responsibility is still on them to carry out the procedure. To say that the audit market has been given very little time to adjust is like saying nothing. Auditors will most likely learn the specifics of ESG in dialogue with the companies they will audit. There are voices coming from the market that dialogue is extremely difficult when one of the parties does not have enough knowledge about the carbon footprint or biodiversity.

Is it good that we are waiting for the OMNIBUS Package?

So it can be said that the OMNIBUS Package is a great hope and salvation for the market. In my opinion, the simplification and flexibility of some of the requirements is most welcome. Probably even more useful would be sector standards and hints on how to approach individual data points. Unfortunately, the devil – as usual – is in the details.

All countries seem to agree on the need to ease the bureaucratic burden on businesses. However, they disagree on how to achieve this goal. The same with the rest is true among entrepreneurs. Most voices support the OMNIBUS Package, but expectations diverge widely.

Classified consultations

At the EC level, there is an awareness of the gap in market demand for change. The President’s announcement itself was extremely general, and details were not promised until February 26. Immediately after the OMNIBUS Package was announced, a barrage of media reports and ideas began as to what would be changed – from the scope of companies subject to reporting regulations and reporting deadlines, to dropping ESRS standards as a requirement. One thing in Ursula von der Leyen’s statement was certain – sustainability reporting in Europe will not disappear.

Thus, at the EC level, a consultation with the market was organized behind closed doors. This stakeholder dialogue was extremely non-transparent, and the list of companies and organizations invited to participate was classified. Although the EC confirmed that the so-called reality check was done, it was in vain to find any information about the conclusions.

Not all companies greeted the announcement of the OMNIBUS Package enthusiastically. Quite a large group, mainly large entities that had already been preparing organizationally for reporting for a long time, were not pleased. These companies have become involved in managing the topic of sustainability and see the benefits. Without covering the entire market with reporting requirements, however, it will be difficult for them to obtain the data they need to make informed business decisions. Another important aspect is the complete unpredictability. Some of the regulations being amended with the OMNIBUS Package have not even begun to take effect yet, and some we have only implemented in Poland for a few months. Doing business in a changing legal environment is not easy, and some companies have been vocal about this, demanding stability. These entities, however, according to media reports, have not been invited to non-public talks with the EC.

Will the OMNIBUS Package make a difference?

We won’t know more before February 26 (and the latest leaks say before the first week of March). About which way the changes will go, I don’t want to speculate. However, I have a thought in my head that the hype around the OMNIBUS Package, while understandable, loses a key element. Nothing is changing, let alone improving, from reporting. The reporting requirements themselves, while extremely elaborate, do not force emissions reductions and environmental action.

The ESRS only mandate disclosure of how a company approaches these issues. For example, there are no sanctions for not having plans to reduce water withdrawals. I have a feeling that there are psychological mechanisms behind the reporting concerns that make CEOs want to be sustainability primes. They don’t want to report that climate change, the environment and society don’t care about them. Even if this is true, writing it in black and white doesn’t want to pass anyone’s signature. Does that mean they care a little, though? I don’t know.

What I know for a fact is that no matter which way the OMNIBUS Package goes, there is no turning back from implementing sustainability. Whether we report or not, deal with the challenges posed by ESG risks we must. It is impossible to forget that both the actions taken and the lack of action cost money. Nor can we pretend that a flood, for example, will never affect us. Even by President Trump’s decree, the fires in California cannot be eradicated, and their risks will be embedded in the valuations of insurance policies or the value of loan collateral for a very long time. No legislative package will change that.