Stockholm (NordSIP) – Following months of speculation and controversy, the European Parliament (EP) in plenary session failed to adopt a joint position on the sustainability aspects of the Omnibus legislative package. The mandate was proposed by the Legal Affairs Committee on 13 October on simplified rules for sustainability reporting and due diligence obligations. Having failed to adopt a joint position on the matter, the EP will again consider the Omnibus reforms on November 13th. Without a clear majority, the EP cannot negotiate the final form of the Omnibus reforms with the European Council and the European Commission (EC).
The Way Here
The simplifications proposed amount to reforms of the existing Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D). Companies subject to CSRD are obliged to report according to European Sustainability Reporting Standards (ESRS). The standards are developed in a draft form by the European Financial Reporting Advisory Group (EFRAG), an independent body bringing together various stakeholders. CS3D requires companies to conduct due diligence on value chains while also obliging large companies to adopt and put into effect a transition plan for climate change mitigation aligned with the 2050 climate neutrality objective of the Paris Agreement as well as intermediate targets under the European Climate Law.
In February 2025, following the June 2024 European Parliament elections and the publication of a report by former ECB president Mario Draghi on competitiveness reforms, the EC proposed a ‘Omnibus’ package of reforms to CSRD and CS3D. Among several other details, the Omnibus package, first announced by EC President Ursula Von der Leyen in November 2024, severely limits the scope of CSRD. This removes around 80% of companies from the scope of CSRD and delays its implementation and that of the CS3D.
Omnibus Reception and Legislative Positions
The EC’s Omnibus package was poorly received outside of the business community. In March 2025, Greenpeace joined 360 other signatories in a joint statement rejecting the Omnibus proposal and describing it as a “disastrous” that “erodes EU’s corporate accountability commitments and slashes human rights and environmental protections”, rendering CS3D “virtually toothless”.
In June 2025, the European Council, representing the governments of EU member states, adopted its joint position on the Omnibus package. Among other changes, the Council’s position on the applicability of the CSRD adds the requirement of net turnover threshold of over €450 million to the Commission’s proposal of increasing the employee threshold to 1000 employees and removes listed SMEs from the scope of the directive. Regarding the scope of application of the CS3D, the Council’s position increases the threshold for applicability to 5000 employees and €1.5 billion net turnover.
Between the Council’s adoption of a negotiating mandate and the EP vote last week, even the business community, initially enthusiastic about the proposals, began to show signs of concerns that the proposed reforms were going too far. In September, 475 organisations signed a statement calling for key components of the original legislation to be preserved. The statement has been signed by many Nordic institutions, including AP7, Nordea Asset Management, AkademikerPension, LD Pensions, and the Church of Sweden.
The proposals of the EP’s Legal Affairs Committee were broadly aligned with those adopted by the Council in June. The proposal was rejected by a plenary session of the EP by 318 votes against, 309 in favour, and 34 abstentions. It seems that the proposal was opposed by some of those in favour of the Omnibus package because they felt it did not go far enough in scrapping CSRD and CS3D, while most of the rest of the opposers felt it went too far.
Next Steps
Following the EP’s rejection of the Legal Affairs Committee proposal, MEPs will vote again on amendments at the upcoming plenary session in Brussels on 13 November. Once a position is adopted the EP will then be able to begin negotiating the final version of the amendments to CSRD and CS3D. The EP continues to aim to finalise the legislation by the end of 2025.
