Regulatory Storm or Clarity? The New Commission Promises to Ease Corporate Reporting Burdens

The European Union's sustainability regulation has expanded rapidly. In recent years, a wave of new regulations has emerged, including the Taxonomy Regulation, the Ecodesign for Sustainable Products Regulation (ESPR), the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the Green Claims Directive (GCD). While these regulations initially apply primarily to large companies, sustainability requirements are also cascading down to small and medium-sized enterprises (SMEs) operating as subcontractors. To establish and maintain business relationships, SMEs must be able to demonstrate responsible practices toward the environment, customers, employees, and stakeholders.

Although harmonized sustainability regulation promotes sustainable business practices and aims to ensure fair treatment of companies across the EU, the increasing regulation and reporting obligations also create administrative burdens. According to a study by the Finnish chapter of the UN Global Compact network, Finnish companies struggle particularly with issues related to the CSRD, CSDDD, the Carbon Border Adjustment Mechanism (CBAM), and the EU Deforestation Regulation. The biggest challenges cited by companies include the complexity of legal requirements, unclear EU guidelines, and the vast amount of data required for reporting. Many companies consider some of these obligations excessive and the workload required to comply with them overwhelming.

To ease reporting obligations, European Commission President Ursula von der Leyen has promised that one of the new Commission’s first proposals will be the Omnibus Simplification package, designed to facilitate business operations within the EU single market. Based on von der Leyen’s statements, the focus is on reducing the administrative burden for companies, particularly by eliminating overlapping reporting requirements. The package proposes simultaneous amendments to multiple EU regulations. According to Valdis Dombrovskis, the Commissioner for Economic Policy, the package aims to reduce reporting obligations imposed by the Taxonomy Regulation, the CSRD, and the CSDDD. The Commission also plans to introduce targeted regulatory simplifications, particularly for so-called small mid-cap companies—those larger than SMEs but smaller than large corporations.

All eyes are on the Omnibus package as its release is set for February 26, 2025. Notably, this package is expected to initiate an entirely new EU legislative process. While the Commission’s goal may be merely to harmonize and streamline existing laws, the legislative process also requires the involvement of the European Parliament and the Council, meaning that member states could propose broader changes. The CSRD and CSDDD, in particular, have been highly contentious in Parliament, and both MEPs and member states may see this as an opportunity to revisit past disagreements and renegotiate key provisions. A relevant comparison is the EU Deforestation Regulation: during a recent 12-month implementation delay, the Parliament sought broader changes to its content, though the Council and Commission ultimately resisted them.

At the Council meeting in late January, finance ministers from the member states expressed support for reducing and simplifying reporting requirements. Germany is currently pushing for a two-year delay in the CSRD’s implementation and proposing significant changes that go far beyond mere simplifications. France also supports the delay. Meanwhile, Polish Prime Minister Donald Tusk, in presenting Poland’s EU Council Presidency priorities to the European Parliament, confirmed that one of Poland’s key goals is to promote a reassessment of EU regulations, including green policies.

We are now at a critical and highly interesting juncture for the future of EU sustainability regulation. The CSRD has not yet been fully transposed into national laws in many member states, and the implementation of the CSDDD is only just beginning. Some member states may delay transposition into national legislation as they await the contents and outcomes of the Omnibus package.

At this moment, it is especially important for businesses to make their voices heard in the discussion on EU sustainability regulation. This ensures that sustainability measures remain practical and enforceable, genuinely addressing key issues. Companies are not merely adapting to the green transition—they also have the opportunity to shape regulatory developments and highlight the specific needs of their industries.

Tuomas Karvonen

The author is an analyst at Blic and an EU public affairs expert