On February 26, 2025, the European Commission unveiled the Simplification Omnibus, a comprehensive proposal designed to streamline regulatory requirements related to corporate sustainability reporting and supply chain transparency. The Simplification Omnibus amends the following Directives:

1. Directive on statutory audits and annual accounts and consolidated accounts;
2. Directive on the annual financial statements, consolidated financial statements and related reports on certain types of undertakings;
3. Directive on corporate sustainability reporting; and
4. Directive on corporate sustainability due diligence.

This initiative seeks to boost Europe’s global competitiveness by reducing bureaucratic hurdles faced by businesses, potentially saving European companies approximately €40 billion. Despite these regulatory adjustments, the EU maintains a steadfast commitment to achieving its 2050 net-zero emission targets.

Key Aspects of the Simplification Omnibus

• Consolidation of Reporting Requirements: The proposal aims to harmonize various sustainability reporting obligations on environmental sustainability,operational activities, etc., thereby reducing redundancy and simplifying compliance processes for businesses. It further postpones sustainability reporting requirements by 2 (two) years for businesses under the scope of the Corporate Sustainability Reporting Directives (CSRD) previously required to comply with reporting for financial year 2025 onwards.
• Enhanced Supply Chain Transparency: By refining existing regulations, the initiative seeks to make it easier for companies to monitor and report on their supply chains, ensuring adherence to environmental and social standards without imposing excessive administrative burdens.​
• Digitalization and Innovation Support: The proposal encourages the adoption of digital tools to facilitate compliance and reporting, thereby promoting innovation and efficiency within the corporate sector.

Implications for International Businesses

For international companies operating within the EU, the Simplification Omnibus presents an opportunity to reduce compliance costs and administrative complexities. By streamlining reporting requirements and enhancing clarity, businesses can allocate resources more effectively, focusing on innovation and growth rather than navigating complex regulatory landscapes.

Stakeholder Reactions

The business community has largely welcomed the proposal, viewing it as a necessary step to enhance competitiveness and reduce unnecessary regulatory burdens. However, some environmental groups express concerns that simplifying regulations could lead to weakened oversight and potential lapses in corporate accountability regarding environmental impacts. The European Commission has addressed these concerns by reaffirming that the simplification measures will not compromise the EU’s environmental objectives, including the 2050 net-zero emission targets . This is also envisaged in the proposal as firms are to take into consideration environmental impacts while carrying out operations.

Next Steps

The Simplification Omnibus proposal will undergo discussions and potential amendments within the European Parliament and among EU member states. Businesses are advised to monitor these developments closely, as the final provisions will impact compliance strategies and operational planning. Engaging with industry associations and regulatory bodies during this period can provide valuable insights and influence the shaping of the final regulations.