EU omnibus bill halted: Political dynamics slow down simplification of CSRD and CSDDD

The political debate surrounding the so-called EU omnibus bill, the negotiations to simplify the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), is in full swing. After the European Parliament’s Legal Affairs Committee had pushed through an agreement, the compromise has now failed in plenary. With 309 votes in favour, 318 against and 34 withholds, the European Parliament rejected the proposal. This makes it clear that direct negotiations with the Council have been halted. The revised drafts will be discussed again at the next plenary session from 11 to 13 November. Amendments can be tabled until then, which means that parts of the compromise could be reopened.

Political pressure on Parliament grows
The vote was followed by intense political debate among several Member States. Chancellor Merz called the vote result ‘unacceptable’ and ‘a fatal mistake that must be corrected’ – a statement that clearly shows how strongly national governments are trying to influence parliamentary decisions. Together with other heads of government, Merz called for the ‘rapid simplification of CSRD and CSDDD’ in a letter to the Council and Parliament.
Parliament President Roberta Metsola is also under pressure. In an interview with the Financial Times, she said: ‘We have received a letter from 22 heads of state and government saying, “Get moving!” – How should I translate that?’

Disagreement across party lines
The failure of the vote shows that the majority ratios in the European Parliament are fragile. While the Greens and Social Democrats criticised the proposed simplifications as too far-reaching, right-wing groups are calling for the rules to be slimmed down even further. There were also differences of opinion within the liberal and social democratic groups.
Conservative rapporteur Jörgen Warborn (EPP) expressed disappointment and called for clarification of positions in order to reach a conclusion in the trilogue by the end of the year. Representatives of NGOs and business associations assessed the outcome differently: While the BDI criticised the standstill as an obstacle to legal certainty, the WWF spoke of a ‘new opportunity for more ambitious sustainability standards’.

What does this mean for companies?
For companies and sustainability managers, the current situation means ongoing uncertainty. Neither the scope of reporting requirements under the CSRD nor the specific requirements of the CSDDD have been finalised. The German Federal Association for Sustainable Business (BNW), of which corsus is a member, has called on parliament to take this opportunity to readjust the thresholds for reporting requirements – with a compromise that both relieves the burden on small and medium-sized enterprises and ensures transparency for large companies.

How does corsus view the debate?
At corsus, we believe that the prevailing uncertainty is hindering the transition to sustainability. Companies that have made a commitment to implementing planned regulations in advance are no longer receiving the benefits they have earned through their efforts and forward thinking due to the significantly watered-down draft regulations. Furthermore, it remains to be seen whether such a weakened draft could contribute to solving global challenges such as the climate crisis, the biodiversity crisis or compliance with human rights due diligence obligations. A pragmatic and at the same time helpful draft is still pending and should be the further goal of the negotiations.
The upcoming plenary session in November will be decisive. If no viable majority can be found for the omnibus compromise, there is a risk of further delays in EU sustainability legislation. Nevertheless, we see a trend in practice: companies should stay on track. Building sustainability structures takes time – especially if they are to serve not only reporting purposes but also the improvement of sustainability issues and performance within the company.

At corsus, we continue to closely monitor political developments. Our stance is that sustainability is and will remain important, with or without buses. And we are a reliable partner who can identify pragmatic and effective solutions for implementation.