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It’s been just over three months since the EU published its Omnibus Proposal, meant to simplify sustainability reporting. But for many companies, it’s done the opposite. Instead of bringing clarity, uncertainty is growing.

In fact, during our recent webinar Three months into the Omnibus Proposal, over 70% of attendees cited uncertainty as their biggest challenge since Omnibus was announced—that is, not knowing where to focus, or whether to continue reporting at all.

Despite this, many major players, from H&M to Philips, are standing firm, continuing to demand ESG data from their entire value chain. This suggests that expectations haven’t shifted much in practice, and companies tend to agree.

In our recent 2025 Post-Omnibus Market Pulse Report, 90% of respondents said they plan to continue ESG reporting, even if it’s no longer mandatory. For many, it’s a strategic decision to protect credibility, meet stakeholder expectations, and keep ESG central to their business strategy.

If you’re still figuring out what the Omnibus Proposal means in real terms, and what your company should do next, then this article is for you.

We’ll walk you through what’s changed and what hasn’t, based on our personal conversations with politicians and lawmakers. We’ll also outline six clear steps to move forward, whether you’re just getting started or already adapting to the Corporate Sustainability Reporting Directive (CSRD) and related frameworks.

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Quick recap: What is the EU Omnibus Proposal?

Published in February 2025, the Omnibus Proposal is a legislative package from the European Commission that bundles together a wide range of regulatory changes, primarily aimed at simplifying EU sustainability rules.

It introduces major rollbacks to laws like the CSRD, EU Taxonomy, and Corporate Sustainability Due Diligence Directive (CSDDD).

Cutting red tape to “stay competitive”

The Commission framed the proposal as a competitiveness measure, citing a 2024 report by Mario Draghi, former President of the European Central Bank, who was appointed by the EU to assess how Europe can boost economic resilience.

In his nearly 400-page report, Draghi argued that the EU’s regulatory environment is no longer fit to support long-term growth and global competitiveness.

Is net zero being sidelined?

But the Omnibus Proposal has faced strong criticism. Many argue that weakening sustainability regulations directly undermines the EU’s goal to reach net zero by 2050.

The Omnibus was also accompanied by the Stop the Clock directive, which allows reporting delays for some companies. For example, Wave 2 CSRD reporters now have up to two additional years before mandatory disclosures take effect.

Key changes to the CSRD under the Omnibus Proposal

So, what’s changed? One of the most significant impacts of the Omnibus Proposal lies in how it reshapes the CSRD, both in scope and complexity.

Fewer companies in scope

Under the original CSRD, companies with more than 250 employees were expected to report, with a phased rollout based on company size. The Omnibus now proposes raising that threshold to 1,000 employees, with some reports suggesting it could rise even further, to 3,000 or even 5,000.

While that’s still under debate, the immediate effect is clear: the number of companies covered by the CSRD would drop from around 50,000 to fewer than 7,000.

Value chain reporting scaled back

There are also changes to value chain reporting. Previously, companies were expected to gather ESG data from all entities in their value chain, regardless of whether those entities were themselves subject to CSRD.

The revised proposal limits this obligation. Now, only suppliers that are also CSRD-reporting entities will need to provide data.

Double materiality may not stay untouched after all

Lastly, the concept of double materiality, a cornerstone of the CSRD, is also being reconsidered. While early commentary suggested it would remain intact, Coolset’s sustainability researcher, Jasper Akkermans, spoke with Wim Bartels, a member of EFRAG’s Sustainability Reporting Board, who indicated that streamlining is likely.

This could mean a more focused, simplified materiality assessment process, though final details are still emerging.

Inside Brussels: The political tug-of-war behind the Omnibus Proposal

The Omnibus Proposal didn’t just appear out of nowhere. It moved through the EU’s legislative process at unusual speed, raising questions from policymakers, watchdogs, and businesses alike.

In Brussels, the debate is now in full swing. The European Parliament is split between two camps: one pushing for deregulation in the name of competitiveness, the other trying to preserve the EU’s climate and social ambitions.

Despite strong polarization, there is political will to reach an agreement, and remarkably, a final decision is expected as early as late 2025, a process that typically takes up to two years.

What policymakers and lawmakers are saying

At the heart of this is a fragile four-party coalition: the European People’s Party (EPP), Socialists & Democrats (S&D), Renew Europe, and the European Greens.

Together, they hold a clear parliamentary majority (454 out of 720 seats) and aim to balance simplification with ESG integrity. But each party brings a different view to the table:

European People’s Party (EPP)

The EPP, the largest group with 188 seats, is driving efforts to raise reporting thresholds and ease compliance burdens, framing the proposal as a way to cut “red tape.”

“The big debate now is: will you stand for growth and jobs or red tape and bureaucracy?” – Tomas Tobé (EPP)

Socialists & Democrats (S&D)

The S&D push back hard, defending environmental and social standards and warning against excessive exemptions that weaken corporate accountability.

The 136-seat party supports maintaining CSDDD climate and due diligence obligations and seeks compromises to preserve the Green Dealʼs core goals.

“This is not simplification, it’s obstructing justice. Removing liability for child labor and deforestation isn’t streamlining – it’s erasing accountability.” – Lara Wolters (S&D)

Renew Europe

Renew Europe with 77 seats takes a middle-ground position. It focuses on practical implementation and calls for more legal clarity and alignment across frameworks without undermining core ESG goals.

“We need all kinds of new omnibuses. And the next one must be a digital omnibus, because we need to simplify the excessive digital laws.” – Svenja Hahn (Renew Europe)

 European Greens

The 53-seat Greens are the strongest defenders of ESG ambition, warning that the Omnibus risks becoming a vehicle for deregulation. It supports simplification only if it doesnʼt weaken ESG impact and insists on keeping CSRD and CSDDD scope broad and effective.

“You’re not reducing bureaucracy – you’re extending impunity. This isn’t simplification. It’s sabotage.” – Marie Toussaint (Greens)

Insights from MEP Kira Marie Peter-Hansen

To better understand the political dynamics surrounding the Omnibus Proposal, the Coolset team also spoke with Kira Marie Peter-Hansen, Vice President of the European Greens and shadow rapporteur in the JURI committee (Legal Affairs).

Critique of the Commission’s strategy

Rather than reopening legislation, Peter-Hansen argued the Commission could have made adjustments through Level 2 acts. This would have avoided the confusion and legal uncertainty now facing many businesses.

Reopening the CSRD, CSDDD, and EU Taxonomy, she said, has led to instability and wasted taxpayer funds.

What the Greens won’t compromise on

She also flagged several red lines for the Greens:

• Keeping the current CSRD scope
• Preserving value chain depth under CSDDD
• Maintaining civil liability provisions

Process flaws and SME exclusion

Peter-Hansen also criticised how the proposal was developed. The process was finalised in under four months (unusually fast for legislation of this scale) and lacked a proper impact assessment.

Most businesses consulted were large corporations from just five countries (Germany, France, Italy, Spain, and the Netherlands). And only 15% of consulted companies were SMEs, despite making up 99% of EU businesses.

A formal complaint has since been filed with the European Ombudsman. It alleges that business lobby groups such as MEDEF, BDI, and Confindustria had their demands incorporated almost verbatim into the draft proposal.

A narrow team shaping wide-reaching rules

Peter-Hansen pointed to Sweden’s outsized influence in shaping the Omnibus. The lead rapporteur for JURI, Jörgen Warborn, the ENVI rapporteur, and a key EPP vice president, Tomas Tobé, are all Swedish.

The broader negotiation team made up of MEPs from Denmark, the Netherlands, France, and Sweden represents a relatively narrow cross-section of the EU for such a significant legislative reform.

Stay engaged, the proposal isn’t final

Despite her concerns, Peter-Hansen encouraged companies not to disengage. The Omnibus is still a proposal, and there’s a window of opportunity to raise concerns and help shape the final legislation. As she put it: “The green transition is a long-term certainty.”

Six practical steps to move forward

Regardless of where the Omnibus lands, companies can’t afford to sit still. The political process may be turbulent, but the long-term direction, toward more transparency and sustainability, isn’t going anywhere.

Here’s how your business can stay prepared and proactive:

1. Clarify your regulatory position

Start by understanding exactly where your company stands. Review the current and proposed scopes of EU sustainability laws CSRD, CSDDD, the EU Taxonomy, and the VSME standard.

Are you still in scope? In a grey zone? Exempt for now? Regardless of status, the message is clear: don’t stop generating ESG data.

2. Build a lean, adaptable reporting system

Use the current “pause” strategically. This is the moment to fix internal inefficiencies, standardize your data, and establish clear audit trails.

Choose flexible, scalable tools like Coolset that can adjust as the rules evolve, without starting from scratch each time.

3. Prepare for a 2025 disclosure dry run

Even if your company isn’t obligated to report yet, a rehearsal round can highlight gaps. In Q3, focus on your core data infrastructure: your double materiality assessment, ESRS general disclosures, and Scope 1-3 estimates. Updated datapoint guidance is expected by October, with a 30–50% reduction in requirements.

In Q4, it’s worth simulating a full ESRS disclosure to get ahead.

4. Draft a climate transition plan

Now’s the time to define your science-based targets, map emissions hotspots, and outline concrete steps for reducing your footprint. Tie the plan to real incentives. Linking it to executive remuneration and budgeting will help embed it into core operations.

5. Create cross-department buy-in around materiality

ESG can’t be siloed. Revisit your materiality assessment and ensure it’s connected to business strategy. Finance, legal, and comms teams should be aligned on what ESG means for your business and how it’s communicated internally and externally.

6. Influence the outcome while you still can

The Omnibus is still in flux, and that means businesses have a voice. Reach out to your country’s EU representatives, engage with MEPs on relevant committees, and join consultations. Whether directly or through business coalitions, your input still matters.

Final thoughts

Three months in, the Omnibus Proposal has created more questions than answers. But if there’s one thing we’re sure of, it’s that ESG reporting isn’t going anywhere, it’s evolving.

Political negotiations may shape the final outcome, but market expectations, investor pressure, and climate realities continue to move in one direction.

Rather than waiting for clarity, now’s the time to act with intention. Understand your position, streamline your reporting, and stay engaged. The companies that treat this moment as an opportunity will be the ones best positioned to adapt, influence, and lead in a fast-changing regulatory landscape.

At Coolset, we’re here to help you do exactly that, with tools and guidance built for mid-sized businesses navigating the complexity of EU sustainability rules. If you’re unsure what the Omnibus means for your company, or how to move forward with confidence, we’re just a conversation away.