Beyond EU Omnibus Confusion: Now That It’s Approved, What Really Changed?
When the EU Omnibus proposal was first introduced, it triggered a wave of uncertainty. Questions quickly followed:
Is sustainability regulation being rolled back? Are companies off the hook? Does this change everything?
Now that the Omnibus package has been officially approved, we can move past speculation and focus on what actually matters.
The short answer: the scope is narrower, timelines are longer, and reporting is simpler, but the EU’s expectations around risk, accountability, and due diligence have not disappeared.
A recalibration, not a reversal
What the approval confirms is not a reversal of direction, but a recalibration. The EU has chosen to narrow the scope of sustainability regulation, concentrating obligations on the largest companies, while simplifying execution and reducing indirect pressure on smaller value-chain partners. The intent is less about doing away with sustainability expectations and more about making them more targeted and workable.
This shift reflects a broader recognition that effective sustainability regulation depends less on volume of reporting and more on the credibility of underlying processes.
CSDDD: Due diligence remains the core requirement
The revised Corporate Sustainability Due Diligence Directive now applies only to larger companies: EU firms with 5,000+ employees and €1.5bn+ turnover, plus non-EU companies generating €1.5bn+ in the EU. Implementation starts in July 2029, with national
enforcement and penalties based on global turnover. These changes drastically narrow the number of companies affected.
What hasn’t changed: CSDDD is still about due diligence, not disclosure. It doesn’t require standardized reports or collecting data for its own sake. Instead, companies must show they have a credible, risk-based process to identify and address human rights and environmental risks in their supply chains.
The revised directive clarifies that companies should focus on key risks rather than assess every supplier, and only request information from smaller partners when necessary. Removing the climate transition plan requirement further emphasizes managing actual impacts over making future commitments.
CSRD: reporting remains, with clearer boundaries
The Corporate Sustainability Reporting Directive has been recalibrated to focus on larger companies. New thresholds require EU firms to have 1,000+ employees and €450m+ in net turnover to report, with equivalent EU turnover thresholds for non-EU companies. The EU is also simplifying requirements by streamlining the European Sustainability Reporting Standards (ESRS) and making sector-specific standards voluntary.
Key supply chain protection: Large companies can no longer pass reporting obligations down to suppliers with fewer than 1,000 employees. This addresses a major concern since CSRD’s adoption—preventing disproportionate data demands from being imposed on smaller suppliers.
What the Omnibus signals about the EU’s direction
Taken together, these changes point to a broader shift in regulatory philosophy. The Omnibus signals a move away from broad, volume-driven reporting toward a more focused model that prioritizes process, governance, and accountability. Fewer companies will be
directly regulated, but those that are in scope will be expected to demonstrate how they manage sustainability and human rights risks in practice.
For affected companies, the key question is no longer how much information can be disclosed, but whether it is possible to explain how risks are identified, decisions are made, actions are taken, and outcomes are monitored over time.
Where Inspectorio’s COE sees companies succeeding — or struggling
From the perspective of the Sustainability & Traceability Center of Excellence (COE), this shift is already visible in how companies are approaching compliance. Organizations that struggle most are not necessarily those lacking data, but those without a clear, consistent due diligence process across teams, regions, and tiers of the supply chain.
Conversely, better prepared companies tend to have aligned workflows for risk assessment, supplier engagement, corrective action, and follow-up — even if those processes were not originally designed with CSDDD or CSRD in mind. The challenge is less about building something entirely new and more about connecting existing practices and making them defensible, traceable, and repeatable.
From confusion to clarity
In that sense, the approval of the Omnibus brings clarity rather than confusion. Sustainability regulation in Europe is becoming less about reporting for reporting’s sake, and more about credible, defensible risk management embedded in day-to-day business operations.
At the COE, we see this as an opportunity for companies to move beyond reactive compliance and toward more resilient, risk-aware supply chain management. The regulatory landscape may continue to evolve, but the underlying expectation is increasingly consistent: know where the risks are, act on them, and be able to show how and why decisions were made.
