Exclusive: EU ‘Omnibus’ sustainability plans raise key industry concerns
The European parliament. pic: Shutterstock
The European Commission has released its ‘Omnibus’ proposals on streamlining corporate sustainability reporting, including for companies across the food and drink sector, which significantly reduce the amount of businesses required to engage with the landmark legislation, writes Neill Barston.
Consequently, the much-anticipated proposals from the EU have been met with major concern from a number of cross-industry observers, NGO’s and businesses that had committed to these frameworks under the wider flagship Green Deal plans.
They had been devised under three specific strands, the Corporate sustainability reporting directive (CSRD), of annual standards reporting, Corporate Sustainability Due Diligence Directive (CSDDD), targeting larger companies on their supply chain transparency, and the Carbon Border adjustment mechanism (CBAM), monitoring carbon outputs.
Observers within the cocoa sector in particular had been monitoring the progress of these respective legislations, especially in light of the linked deforestation legislation, the EUDR, having itself been pushed back by a year in the wake of political and industry lobbying.
Collectively, these measures had been designed to deliver crucial environmental, human and social rights-linked supply chain transparency protections that had been widely hailed as a milestone moment within Europe – which have faced pushback from industrial lobbying groups and right wing conservative governments, citing economic impact fears.
According to the EU, its latest set of proposals will boost competitiveness, and cut administrative costs by €6.3 billion, and attract private investment of around €50 billion in supporting the region’s economies against a turbulent outlook.
The Commission has asserted that its plans will make it easier for the 27-strong bloc to engage with the landmark legislative programme, and will significantly reduce requirements for SME businesses operating in the region. It stated that simplifying measures will generate a further €350 million in cost savings.
Among the key changes proposed by the EU , the CSRD will only require businesses sized with 1,000 people or more (it had originally been intended to apply to companies of 500 employees and above), removing around 80% of companies from these requirements.
This is an area that has already attracted strong industry criticism, with sector observers noting that the latest amendments had not been achieved with sufficient discussion with industry, including with firms operating across confectionery, snacks and bakery markets.
Furthermore, reporting requirements are also proposed to be put back a full two years, from 2026 to 2028, with the EU Commission claiming that exempting smaller businesses from CSRD would remove unnecessary burdens.
Another major proposal from the EU is the removal of a requirement of monitoring from being an annual basis, to just once every five years- which it claimed would create ‘a level playing field’.
The Commission said that as part of its proposals, it would attempt to unlock investment potential through specific programmes including its InvestEU initiative, aiming to break down barriers to driving wider economic growth.
Major industry concerns
In response, Antonie Fountain, managing director of the cocoa sector NGO, the Voice Network, who has played a key role in advocating for legislative reform, expressed considerable concern on the plans.
He noted that there had been a ‘dismantling of due diligence requirements’ beyond tier one, leaving no clear scrutiny of supply operations further down the chain – which had been at the heart of the legislation’s purpose, strengthening protection for communities in supply chains, including reporting on child labour risks and mitigating actions.
“It looks like the Commission is wilfully gutting these essential sustainability regulations. Years of diligent lawmaking is being thrown under the bus, under the rather baseless guise of ‘competitiveness’. Both the outcome and the way it’s being reached are an example of opportunistic right wing populism at its very ugliest.”
He also noted another particularly concerning element of the proposals, was the introduction of clauses that forbade individual countries from developing more ambitious regulations in the wake of the legislation’s introduction.
Commenting on the its proposals, Ursula von der Leyen, President of the European Commission, asserted that simplifying legislative measures would bring positive economic and environmental benefits.
She said: “Simplification promised, simplification delivered! We are presenting our first proposal for far-reaching simplification. EU companies will benefit from streamlined rules on sustainable finance reporting, sustainability due diligence and taxonomy.
This will make life easier for our businesses while ensuring we stay firmly on course toward our decarbonisation goals. And more simplification is on the way.”
Stéphane Séjourné, Executive Vice-President for Prosperity and Industrial Strategy, echoed her sentiments.
He added: “We are taking concrete steps to cut red tape and make EU rules more accessible and effective for citizens and businesses. Today’s package is the first step of our far-reaching simplification efforts across all sectors of legislation. We can show that Europe is not only an incredible market to invest, produce, sell and consume but also a simple market.
“This proposal delivers real simplifications—less administrative burden, easier access to funding, and clearer, more predictable rules. We keep our objectives but change the way to better achieve them.”
The proposals will now be subject to a vote within the European Parliament, against a backdrop of conservative groups, led by the European People’s Party having already lobbied to push back timetables and scope surrounding EUDR regulations.
