Omnibus initiative to simplify the CSRD, CSDDD and the EU taxonomy

On 29 January 2025, the Commission of the European Union published a ‘Compass for Competitiveness’ (EU Compass) accompanied by a press release from EU Commission President Ursula von der Leyen.

The EU Compass contains, among other things, some indications of the direction in which the omnibus initiative to simplify the CSRD (Corporate Sustainability Reporting Directive), CSDDD (Corporate Sustainability Due Diligence Directive; European Supply Chain Directive) and the EU taxonomy should go:

• The declared aim is to reduce EU reporting obligations for all companies by 25% and for SMEs by 35%.
• A new category is to be created for companies that are ‘larger than SMEs but smaller than large companies’ (so-called small ‘mid-caps’). Specific thresholds are not expected to be proposed until the omnibus initiative.
• Companies in this size category are to benefit from regulatory simplifications ‘in the same sense as SMEs’. In general, the disclosure requirements should be proportionate to the scope of the company's activities.
• In addition, the required information is to be better aligned with the needs of investors. It should be ensured that investments in smaller companies are not impaired by the reporting during the transition phase.
• The initial application dates for sustainability reporting should be proportionate.
• Measures are planned to prevent the ‘trickle-down’ effect of reporting requirements on smaller companies in the supply chain.

The omnibus package has been announced for 26 February 2025.

The report on the competitiveness of the European Union and the EU Compass can be found on the EU Commission's website.