The conclusion of interinstitutional negotiations on the first Omnibus package today, marks a major setback for the EU’s corporate sustainability framework, with a decision to weaken the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).
“This outcome reflects a troubling trend in the European Parliament, where the conservative bloc has increasingly aligned with far-right agendas, legitimising polarising demands and pushing aside science-based evidence and warnings,” said Mariana Ferreira, Sustainable Finance Policy Officer at WWF European Policy Office.
The process, which was initiated by the European Commission in early 2025, has been defined by unnecessary urgency and, as concluded recently by the European Ombudsman, ‘maladministration’ and lack of evidence. This approach has now resulted in the significant weakening of the legal framework and comes in sharp contrast with the years of careful work, thorough consultations, and evidence-based decision-making that built it in the first place.
Throughout the year, Commission officials assured the public that the Omnibus package intended to simplify without deregulating, but as the chapter closes, it is evident that co-legislators have dismantled core elements of the CSDDD and the CSRD. Among the major casualties are the mandatory Climate Transition Plans, comprehensive scopes of application, and a harmonised civil liability regime.
“Under the guise of easing regulatory burdens, the EU engaged in a race to the bottom, rushing to undo necessary safeguards that were set in place to protect our nature and climate, as well as to secure future economic prosperity. Instead of focusing on the successful implementation of the laws, decision-makers shifted their focus to short-term political gains, ignoring the strong evidence showing that corporate climate targets are not only feasible, but make a lot of sense for companies,” said Sebastien Godinot, Senior Economist at WWF European Policy Office.
The Science-Based Targets initiative (SBTi) shows that setting 1.5°C-aligned targets is both realistic and widely adopted, with 12,000 companies across 104 countries, including all EU Member States, already on board. Climate transition plans are also going mainstream globally, notably driven by the International Sustainability Standards Board (ISSB) disclosure standards.
In an attempt to achieve simplicity and clarity, the Commission opened a Pandora’s box that sets a clear precedent for all future omnibus “simplification” packages. The first omnibus had a rough start, with the Commission proposing a weakening of key provisions in the EU’s corporate sustainability framework. Following that, each step of the decision-making process gutted the laws further, brushing aside scientific evidence, lowering environmental and human rights protections, and establishing a climate of regulatory uncertainty for businesses. The final result demonstrates a set of laws that lack any ambition and represent the end of EU leadership on corporate sustainability.
“After years of positioning itself as a sustainability leader, it is disappointing to see the EU stepping back and ignoring the science meant to guide decision-making,” added Sebastien Godinot.
Strong corporate sustainability rules remain essential for resilient, responsible business conduct. The EU must reconsider this course and restore the ambition required to support corporate sustainability in an era of escalating climate, environmental, and social crises.
