European corporations, investors, and industry groups have raised concerns about the European Commission’s upcoming “Omnibus” package, which aims to integrate key sustainability regulations. This legislation includes the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), and Taxonomy Regulation. While it seeks to reduce inconsistencies across regulations, companies worry that the effort may reopen agreed-upon rules, potentially undermining legal stability and business investments. The move comes as the EU Commission prioritizes reducing compliance burdens for businesses, following President Ursula von der Leyen’s November 2024 announcement of the streamlining initiative.
What are companies worried about?
The letter signed by major companies, including Nestlé, Unilever, Mars, and Ferrero, acknowledges the commission’s intention to uphold the content of existing laws. However, it expresses apprehension that the process may become an avenue to renegotiate regulations. The signatories emphasized that businesses have allocated significant resources to meet requirements under the current sustainability framework. They urged the Commission to clarify explicitly that the legal texts already adopted will not be reopened for debate, emphasizing the importance of maintaining policy certainty and predictability.
Could the CSDDD be affected?
Particular anxiety surrounds the CSDDD regulation, which mandates large corporations to address human rights and environmental impacts along their value chains. Adopted in May 2024, the regulation was already adjusted during its legislative journey, narrowing its scope and extending its implementation timeline. Companies fear revisiting this legislation could jeopardize progress and increase uncertainty in aligning with clearly defined sustainability obligations.
A broader context of these developments reveals that EU sustainability laws have faced scrutiny since their inception. While businesses largely support policies fostering transparency and accountability, debates surrounding implementation timelines and compliance complexities have been ongoing. For instance, the CSRD faced earlier criticism for its broad coverage and potential administrative burden. Although the Omnibus package seeks to address such challenges, the risk of reopening finalized rules adds another layer of concern for stakeholders.
The letter further pointed out the potential long-term benefits of the sustainability regulations, asserting that they could strengthen European companies’ resilience and competitive edge. It emphasized the need for consistent and clear frameworks to enable effective application and achieve these goals. Companies called for the Commission’s guidance to ensure the laws remain both practical and functional for various stakeholders, including businesses, workers, and consumers.
The European Commission is expected to reveal more details about the Omnibus package in February. Meanwhile, businesses continue to advocate for policy stability as they navigate the evolving regulatory landscape. The next steps will determine whether the Commission can balance reducing burdens with maintaining coherence in sustainability obligations.
As sustainability becomes a central focus in corporate governance, the balance between regulatory refinement and preserving legal predictability remains critical. Companies highlight that predictable frameworks not only reduce administrative complexities but also foster confidence in long-term investments. Striking this balance will likely depend on how the European Commission navigates stakeholder concerns in the coming months.
