Von der Leyen's omnibus puts businesses on a tightrope.

by Mariana Ferreira (She/her) , Sustainable Finance Policy Officer at WWF EU

European Commission President Ursula von der Leyen recently unveiled an ‘omnibus’ commitment on three key EU laws on corporate reporting (CSRD), corporate due diligence (CSDDD) and the EU Taxonomy. The announcement presents more questions than answers and raises a perfect storm of legal uncertainty, confusion, and stress for businesses. If passed, it would mark one of the most significant missteps of von der Leyen’s tenure—and a betrayal of the very commitments on the Green Deal made in the past years.

The last thing European companies need is another regulatory upheaval. Far from providing clarity, the proposal will take time and risk introducing unprecedented legal uncertainty. For organisations already prioritising sustainability1 as a strategic way to manage risks2 or mobilising resources to ensure timely compliance with the CSRD in 2025, von der Leyen is undermining their efforts towards competitive sustainability, while disempowering corporate leaders rightfully committed to the EU's environmental and social objectives. Reopening these files will erode the work of frontrunners who are genuinely committed to compliance, while validating the inaction of laggards who will be forced to embed sustainability later3, but at a higher cost to their business. It is a race to the bottom.

This proposal follows a recent commitment to cut reporting requirements by 25%, yet there is no supporting analysis or detailed modeling on this target choice explaining how this will be achieved without undermining the policy aims of EU laws. This lack of evidence basis and clarity stands in direct contradiction to the European Commission’s own Better Regulation guidelines, which should provide clear, predictable, and transparent rules that allow businesses to plan with confidence. Von der Leyen’s vague omnibus proposal, which is already creating shockwaves in European businesses, sidelines these principles and puts the very foundations of smart regulation and implementation at risk.

It remains to be seen if von der Leyen will once again betray her promises on corporate sustainability. Under her leadership, the EU has positioned itself as a global leader in the fight against climate change, particularly through the European Green Deal (EGD). However, in recent months, she has started? to backtrack on environmental commitments and has instead chosen to satisfy one-sided, simplistic, populist narratives on competitiveness. The delay in the Deforestation Regulation, a vital part of the EGD agenda, is a clear example of this retreat. On top, once the Commission reopens the Pandora box – that is, the painstakingly negotiated text of these legislations – it risks losing control in front of the Parliament and Council, as proven by the Deforestation fiasco in which the very political group of von der Leyen tabled additional deregulatory amendments - adding to confusion and legal uncertainty risks. The amendments subsequently had to be withdrawn facing Council opposition.

Hence with the omnibus announcement, one cannot help but wonder if von der Leyen is willing to sacrifice years of policy shaping, maturing and careful crafting in the name of the narrative that the framework is too burdensome, potentially undermining the EU's own strategic objectives. The omnibus is more likely to be a political maneuver disguised as regulatory reform, but with serious negative long-term consequences for businesses, citizens, and the environment. It has the potential to discredit the EU’s global leadership on sustainable finance and corporate transparency, as well as to devalue a meticulous? framework designed to save costs for companies? and ensure medium and long-term economic prosperity. EU companies and citizens deserve better than simplistic solutions aimed at sedating populist views.?

Instead, European businesses need to be guided and supported through smart implementation. The streamlining of processes to make compliance more efficient and accessible for companies must be prioritised over deregulation. Simplifying and effectively implementing sustainability reporting should focus on practical guidance, implementation support, capacity building for states, financial assistance for companies, and the development of level 2 legislation to ensure consistency across EU law on key implementation issues. WWF has referred to other means to achieve effective implementation in a recent briefing.

What we need is not a radical overhaul of the regulatory landscape, but the thoughtful, strategic implementation of policies that move Europe forward on its Green Deal and sustainability commitments.

References:

1 81% of companies not covered by CSRD still plan to comply (86% for US companies): source.

2 97% of the executives globally agree that climate change will impact their company’s strategy and operations over the next three years to either moderate/some or high/very high extent. Source: Deloitte 2023 study of over 2000 C-level executives from 24 countries; More than three-quarters of large firms agree that their insurance costs would rise because of climate change and that there was an increased risk of interruptions to production. Source: ECB's 2022 survey on 90 large and mostly multinational companies.

3 Only 2% of the largest companies in Europe and the US have high levels of sustainability competency on their boards, suggesting that companies are inadequately equipped to address the issues they agree are material to their operations (see figures above). Source: report by Copenhagen Business School and Competent Boards (2024).

? See the impact assessment carried out by the EU Commission in preparation of the CSRD: “The market on its own has also not so far been able to ensure adequate convergence and consolidation between the different frameworks and standards (...). This is a significant driver of the reporting burden for preparers, and of the problems faced by users in terms of limited comparability and relevance of reported information.” (p.11).