Omnibus Initiative: What Are the Implications for Businesses?

Balancing Legal Uncertainty and Strategic Decision-Making

While the Omnibus proposal offers several benefits for businesses – such as rule simplifications, better alignment between various initiatives, and greater consideration for SMEs – it also creates significant uncertainty. It remains unclear whether and to what extent the final legal text, to be adopted by both the European Parliament and the Council, will retain the amendments proposed by the European Commission. In addition, the duration of negotiations between the three institutions remains uncertain.

For numerous companies, the implementation of the rules – whether related to the CSRD or CBAM – is already underway or imminent. Many have already begun establishing new internal processes, adjusting governance systems, engaging with stakeholders, and investing in technology to streamline compliance.

In the light of ongoing regulatory uncertainty, businesses now face a critical decision: Should they pause and wait for legislative clarity, scale back their efforts, or stay committed to driving sustainability?

Why Sustainability Legislation Remains a Strategic Imperative

All the regulations at the center of the Omnibus proposal – the CSRD, EU Taxonomy, CSDDD, and CBAM – are here to stay. And while some of the requirements may change, the core obligations will remain:

• CSRD: In-scope companies with more than 1,000 employees must still conduct a complex double materiality assessment (no changes in the proposal), engage with stakeholders, collect extensive sustainability data across a wide range of topics, strengthen internal collaboration, and optimize their data management. Additionally, smaller companies with fewer than 1,000 employees will still be required to provide sustainability data in line with the VSME reporting standard developed by EFRAG.

• CBAM: In-scope companies must continue to collect emissions data from their upstream suppliers, report on a regular basis, and prepare for the implementation phase starting on January 1, 2026. Importantly, the scope of the regulation is likely to expand to cover additional sectors under the EU Emissions Trading System (EU ETS), downstream goods, and indirect emissions, with a legislative proposal expected next year. Other countries are also planning to introduce similar mechanisms, with the UK set to implement its own CBAM as early as 2027.

• CSDDD: With the scope of application unchanged, affected companies must still carry out full due diligence on their direct suppliers. Indirect business partners must be assessed whenever plausible information suggests that adverse impacts have occurred or may arise, requiring enhanced visibility into the supply chain and lower tiers. Upon request, SMEs will have to provide sustainability information in accordance with the VSME reporting standard under the CSRD. In some cases , companies falling under the CSDDD may demand further information from their business partners.

The Omnibus proposes delays to the CSRD and CSDDD timelines, offering companies some breathing space. However, experience shows that compliance with these laws is complex and requires proactive management.

To ensure readiness, companies must optimize internal processes, strengthen their governance frameworks, and streamline data management. Technology solutions must also be deployed and integrated across the organization. These efforts require time, resources, and expertise, making early preparation essential.

In addition, regulations not affected by the Omnibus, such as the EU Forced Labor Regulation and the EU Deforestation Regulation (EUDR), mandate that companies analyze risks down to lower-tier suppliers, collect data, and implement robust due diligence systems – highlighting clear overlaps with core processes underpinning the CSRD and CSDDD.

Staying Ahead: The Case for Continued Sustainability Efforts

Despite regulatory uncertainty in the EU, there are compelling reasons for companies to uphold or even accelerate their sustainability efforts:

1. 1. Transparency as a strategic priority: Sustainability requires a comprehensive understanding of the entire value chain. Greater visibility enables companies to assess their impacts, spot risks, manage critical dependencies, and uncover business opportunities.

   2. Proactive risk management: Sustainability concerns, especially in complex supply chains, have become an essential component of risk management, enhancing resilience in times of recurring disruptions and shocks.

   3. Investor and stakeholder expectations: Demands for transparency, accountability, and sustainability action continue to grow, regardless of regulatory mandates and new timelines.

   4. Competitive edge: Early adopters are better positioned to meet regulatory requirements, differentiate their brands, and strengthen stakeholder and customer trust.

   5. Non-EU regulatory pressure: Most companies operate internationally and must comply with regulatory requirements in other jurisdictions. These include legislation on forced labor – including Modern Slavery Acts and the U.S. Uyghur Forced Labor Prevention Act (UFLPA) – as well as regulations on conflict minerals, product compliance, and an increasing number of mandatory sustainability reporting standards.

By staying the course, companies can proactively manage regulatory obligations and lay the foundation for leveraging sustainability as a strategic advantage, turning it into a driver of resilience, growth, and competitiveness.

How Software Solutions Power Business Agility

In times of uncertainty, modern technology provides companies with the flexibility to respond swiftly to disruptions and regulatory changes. The proposed amendments to tier-n due diligence under the CSDDD (see our other blog post for details) illustrate this need. When plausible information about risks or adverse impacts in lower-tier supply chains emerges, companies must react quickly without overly straining their resources.

This is where state-of-the-art technology, such as AI-based supply chain mapping, becomes invaluable. It enables ad-hoc risk assessments and delivers the insights businesses need to stay ahead.

To learn how our CSRD, CSDDD, CBAM, and Multi-Tier Visibility solutions can help you navigate uncertainty while ensuring compliance, resilience, and competitiveness, contact us or schedule a demo.

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