EU Omnibus Draft Eases Sustainability Reporting & Due Diligence Rules

The European Parliament's Legal Affairs Committee has approved a draft of the EU Omnibus package, aiming to simplify sustainability reporting and due diligence requirements. The new rules narrow the scope of mandatory reporting, applying primarily to companies with over 1,000 employees and a net annual turnover exceeding €450 million. For smaller companies, reporting becomes voluntary, guided by the European Commission's standards. Additionally, sector-specific reporting is now optional, and large firms are prohibited from demanding information beyond voluntary standards from smaller suppliers. To support compliance, the European Commission plans to establish a digital portal offering free access to templates, guidelines, and information on all EU reporting requirements. This initiative complements the European Single Access Point, the EU's central hub for financial and sustainability information. The goal is to reduce administrative and financial costs for businesses while maintaining the EU's green transition objectives. While the simplification aims to ease the regulatory burden on companies, it has sparked debate. Some stakeholders express concern that reducing the scope of sustainability reporting may undermine transparency and accountability. The European Commission maintains that the changes will strengthen competitiveness and keep Europe on track toward its decarbonization goals.