The European Commission plans to present the Omnibus Simplification Package—comprising a communication and a legislative proposal—on 26 February.

This initiative follows the Budapest Declaration of November 2024, where European Union political leaders emphasised the urgent need to address competitiveness challenges and support businesses.

In the declaration, EU leaders agreed to “launch a simplification revolution, ensuring a clear, simple, and smart regulatory framework for businesses and drastically reducing administrative, regulatory, and reporting burdens, particularly for SMEs.” They committed to “adopt an enabling mindset based on trust, allowing businesses to thrive without excessive regulation.” Key objectives to be implemented by the Commission without delay include presenting concrete proposals to reduce reporting requirements by at least 25% in the first half of 2025 and incorporating impact assessments on bureaucracy and competitiveness into their proposals.

The Omnibus Package aims primarily to reform the EU Taxonomy, the Corporate Sustainability Reporting Directive (CSRD), and the Corporate Sustainability Due Diligence Directive (CSDDD). This responds to concerns from various market players about the administrative and financial burdens arising from legislative overlap and overload.

It is worth noting that these three targeted legislative acts constitute a significant part of the EU’s effort to align European business activity with the objectives of the Paris Agreement.

While seeking to promote companies’ ESG practices and methodologies and improve the reliability and comparability of their guiding criteria, the European Union, in strengthening sustainability reporting requirements, has also significantly expanded reporting obligations. This has made the process more complex and time-consuming, not always comprehensible, and often challenging for many businesses.

In this regard, the President of the European Commission stated that “often overlapping” reporting requirements could be streamlined to “reduce red tape” and reporting obligations while preserving the legislation’s objectives.

According to Ursula von der Leyen, the European Commission “will present proposals to simplify, consolidate, and codify legislation to eliminate any overlaps and contradictions while maintaining high standards.”

Reaching an agreement on this consolidation of the three legislative acts appears to be a significant challenge, given the divergent, if not contradictory, approaches and priorities of EU Member States, European institutions, businesses, and consumers.

Despite repeated assurances that the EU should not alter its course regarding the objectives of legislation adopted during the last political cycle, which was indelibly shaped by the European Green Deal, there has been some apprehension, particularly from sectors more closely aligned with environmental and sustainability advocacy. Concerns have been raised that the February package could reduce or limit key reporting requirements under the CSRD, CSDDD, or the Taxonomy Regulation, disadvantaging those who have adopted them early.

There is also the possibility that other European legislation—particularly that deemed overly burdensome in the Draghi report—may be addressed in the package.

Our team is available for further information.