No data, no control: a critical look at the omnibus trilogue

Negotiations on the EU’s so-called omnibus package are entering the next phase. According to the current schedule, the trilogue, i.e. the round of negotiations between the European Parliament, the Council and the Commission, is to be concluded by 8 December 2026. However, the latest vote shows that the positions of the institutions are far apart. According to the wishes of the majority in Parliament, which came about as a result of an ominous coalition between conservative and right-wing parties, it appears that more and more companies will be exempt from sustainability reporting. corsus considers these developments to be detrimental to the future viability of the European economy and to the implementation of sustainability goals worldwide.

One point of contention in the trilogue is the scope of the Corporate Sustainability Reporting Directive (CSRD). While the Council assumes that 4,792 companies would be subject to reporting requirements in future, the Parliament sees only 3,914 companies falling within the scope – assuming that around 30 per cent of subsidiaries report independently. The decision thus amounts to an estimated reduction of around 90 to 92 per cent of the companies originally subject to reporting requirements. Another critical point of negotiation is the climate transition plans. These are actually considered the core of future sustainable corporate governance, as they are intended to disclose how companies are shaping their transformation paths and decarbonisation strategies. However, according to the Parliament, these should no longer be mandatory. If this were to be implemented definitively, the EU would lose a key instrument for obtaining reliable, comparable and comprehensive sustainability data. Data that helps to steer sustainability activities in order to meet global challenges and that is also needed by investors. Both the European Central Bank and other investors and banks warn that further weakening of the requirements would lead to a significant lack of transparency and data. Without reliable information on emissions and transformation measures, banks, for example, lack the basis for making more sustainable lending decisions. In a recent letter, ECB President Christine Lagarde therefore expressly emphasised that watering down transparency requirements would make the financial sector structurally blind. Climate risks could then no longer be adequately assessed.

Nevertheless, the EU claims that it will still be able to achieve its climate targets. Just before the Conference of Parties (COP) in Belém, the EU managed to update its climate targets and agree to reduce its emissions by 90 per cent by 2040. However, it is also watering down its targets by allowing five per cent of them to be achieved by financing climate protection measures elsewhere in the world (certificates). Since the five per cent refers to 1990, this means, according to the Öko-Institut, that the EU will be able to emit around fifty per cent more greenhouse gases in 2040 than would have been the case without the certificate scheme.

On one point in the omnibus procedure, there is formal agreement between Parliament and the Council, but not in a positive sense: civil liability is to be abolished under the Corporate Social Due Diligence Directive (CSDDD). In addition, the new corporate thresholds of 5,000 employees and €1.5 billion in turnover would mean that only around 1,300 companies across the EU would be affected by the reporting requirements under the CSDDD. This would significantly reduce the directive’s effectiveness and cause it to lose much of its original enforcement power.
At the same time, a look at the corporate discourse shows that the widespread claim that companies categorically reject the CSRD or CSDDD is inaccurate. Although it is debatable whether the multitude of original indicators is useful or whether each individual derivation of the so-called IROs (impacts, risks, opportunities) for assessing sustainability issues needs to be so detailed, even well-known companies do not want the regulation to be abolished, but rather a practicable and reliable implementation.

An insightful example of the controversy surrounds the CSDDD. In the so-called ‘Evian Letter’, the CEOs of Siemens and TotalEnergies claimed to speak on behalf of all 46 participants at the Franco-German summit in favour of completely abolishing the CSDDD. It quickly became apparent that this statement did not correspond to the actual positions of many companies. SAP publicly stated that the letter had not been coordinated with them and was not in line with their position. The CEO of Bpifrance stated that he had not seen the letter before it was published, and Amundi emphasised that it had neither participated nor signed it. Other companies such as BMW, Danone and BASF made it clear that while they were in favour of simplifications, they did not support the abolition of the directive. Responses to the “Evian-letter”

In addition, there are also companies whose managing directors are actively campaigning for the preservation of the CSDDD. Antje von Dewitz, CEO of VAUDE and board member of the German Federal Association for Sustainable Business (BNW), in which corsus is also involved, writes in a recent LinkedIn post (in German): ‘Regulation may be simplified – but simplification must not lead to the abolition of the core objectives. There are ways to reduce #bureaucracy without watering down the objectives: proportional requirements, digital testing and reporting processes, clear guidelines. Many associations have proposed precisely such solutions.‘ She points out that the current proposals will result in ’a patchwork of rules that allows for neither legal certainty nor planning. This is also reflected in the assessment of the Federal Association for Sustainable Business (BNW): The political course is creating uncertainty, undermining standards and opening the door to developments that weaken Europe – both socially and economically.”

Against this backdrop in particular, it becomes clear how important transparency and clarity are in the political debate. Companies are calling for clear and stable framework conditions, the financial sector needs reliable sustainability data, and politicians must ensure that climate targets can actually be achieved.

corsus continues to recommend that companies consistently expand their sustainability strategies and effectively implement human rights in their supply chains, otherwise they will be taking a considerable and long-term risk.