Between sustainability and simplification: the path of Omnibus Package I and the fine line of European balance

In its October deliberations, the JURI Committee redefined some key aspects of the Omnibus Package I, proposed by the European Commission in February 2025, extending the scope for simplification compared to the Executive's original proposal.

With regard to the CSRD, the European Commission had envisaged an 80 per cent reduction in the number of companies subject to the obligation to report their sustainability performance. The JURI Committee further narrowed the scope, establishing the obligation exclusively for companies with more than 1.000 employees and an annual turnover of more than 450 million euro, leaving other companies free to report on a voluntary basis.

Similarly, with regard to the CSDDD – the directive on sustainability due diligence – JURI proposed limiting its application to large operators, i.e. companies with more than 5.000 employees and a turnover exceeding 1.5 billion euro.

The methodological change introduced appears particularly significant: the universal due diligence obligation has been replaced by a risk-based approach. Companies are only required to take action if there are concrete risks of adverse impacts on human rights or the environment along their supply chain, in line with the UN Guiding Principles. According to supporters, this approach is more pragmatic and proportionate; critics, on the other hand, argue that it may lead to less clearly defined areas of responsibility.

The obligations to draw up transition plans to mitigate climate change, consistent with the Paris Agreement, have remained in place, albeit with more cautious terminology. The reference to 'best efforts' has been replaced by 'reasonable efforts', making the commitments more realistic and proportionate. Explicit references to the 1.5 °C global warming limit and the interim climate neutrality targets for 2050 have also been removed, while maintaining the need to adopt credible and transparent plans.

On 22 October, in Strasbourg, the plenary assembly rejected JURI's negotiating position by a surprising vote: 318 against, 309 in favour and 34 abstentions. This caught many off guard and inevitably reflects deep divisions within the European Parliament.

The dissent was based on fears that the compromise proposed by the JURI Committee went beyond a mere 'technical streamlining' of sustainability rules. Indeed, the suggested changes were perceived as disguised deregulation, capable of weakening the principles of transparency and accountability underlying the original directives. Nevertheless, some members of the European Parliament considered the rejection a missed opportunity to lighten a regulatory framework perceived as overly burdensome, especially for small and medium-sized companies, with possible negative effects on European competitiveness.

With its vote against the proposal, the European Parliament has effectively suspended the start of trilogues – interinstitutional negotiations between the Parliament, the Council and the Commission – postponing the entire legislative process. The Parliament will return to examine the text and related amendments at the plenary session in Brussels, scheduled for 13 November, when it will be possible to assess whether Omnibus I can resume its course.

The vote scheduled for November will be a crucial step for the future of corporate sustainability in Europe. The rules may undergo adjustments, but transparency, accountability and commitment to sustainability will hopefully remain the pillars of the European model. In this phase of uncertainty, companies are called upon to remain vigilant and prepare in advance, initiating a process of analysis and adaptation and leveraging specialist expertise to anticipate changes, react promptly to new obligations and capitalise on the opportunities offered by a transition that aims to reconcile sustainability and competitiveness.