Momentum is building around a big shift in European sustainability regulations. The European Commission is looking to consolidate three key directives — the EU Taxonomy, Corporate Sustainability Reporting Directive (CSRD), and Corporate Sustainability Due Diligence Directive (CS3D) — into a single regulatory framework. People familiar with the process now believe more information on the Omnibus Simplification Package will be published in February 2025.
This blog explores the reasons for the proposal, how the three directives are related, and what companies should do today to prepare.
Less Complexity, Lower Costs
Companies across the EU have voiced concern about the administrative and financial burdens posed by overlapping sustainability regulations. Many business leaders — especially those in small and medium-sized enterprises (SMEs) — think juggling multiple directives creates confusion and high compliance costs.
Bringing these three directives together into a single “omnibus” regulation could reduce red tape and streamline compliance. EU policymakers are under pressure to preserve ambitious climate goals while also addressing industry’s worry that the rules are too heavy-handed. Climate activists are concerned this move signals a weakening of efforts toward reaching climate goals.
Whether the final result lightens the load or leads to more complexity hinges on the law’s drafting. In either case, the reason for this change is clear: standardize corporate sustainability requirements, cut down on duplicate efforts, and enable smoother compliance.
The Three Pillars: EU Taxonomy, CSRD & CS3D
The upcoming proposal will merge three related regulations:
EU Taxonomy (2020)
Defines what is considered “green” or environmentally friendly. This classification helps companies, investors, and stakeholders speak a common language about sustainability.
Corporate Sustainability Reporting Directive (2023)
A broad-reaching directive that requires companies to disclose relevant environmental, social, and governance (ESG) data points within a structured sustainability report. This law establishes reporting deadlines starting in 2025 for large businesses, with plans to expand to SMEs and non-EU entities in 2026.
Corporate Sustainability Due Diligence Directive (2024)
Commonly referred to as CSDDD or CS3D, the directive extends beyond direct corporate actions to include legal liability for supply chain partners. The directive faced pushback from businesses wary of additional regulatory load and was ultimately reduced in scope during final negotiations.
These three pieces of legislation form the bedrock of the EU’s push to align corporate activity with the Paris Agreement goals.
Looking Ahead: What This Means for Companies
Maintain Existing Sustainability Efforts
Even with consolidation on the horizon, companies should continue building strong compliance programs. The core requirements — reporting on ESG topics, practicing due diligence, and meeting taxonomy guidelines — are not disappearing. They are simply being merged
Get Ready for a New Regulatory Landscape
Once published, the Omnibus Simplification Package will trigger fresh legislative processes. In her 2023 State of the Union speech, Ursula von der Leyen expressed concerns about the over-regulation of SMEs, indicating a desire for friendlier terms for smaller businesses. But larger companies with complex supply chains should still anticipate rigorous due diligence expectations.
Stay Engaged With Policymakers
Businesses have a window of opportunity to make their voices heard. By actively participating in consultations or industry coalitions, companies can help shape key details of the upcoming legislation, such as phased deadlines, sector-specific standards, and enforcement approaches.
Your Next Steps
With the European Commission set to introduce the Omnibus Simplification Package, companies face both uncertainty and opportunity. For now, the best course of action is to press ahead with strong supply chain sustainability management. By doing so, businesses like yours will be well-prepared for whatever shape the final omnibus regulation takes.
For more information about how Assent can elevate your program in 2025, book a demo with our team.
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