EU Parliament Rejects Omnibus I Compromise — What It Means for CSRD and CSDDD

Brussels, October 2025 – The European Parliament has rejected the proposal to begin trilogue negotiations with the European Commission and the Council on the Omnibus I package, narrowly voting 318 against, 309 in favour, and 34 abstentions.

The decision delays one of the EU’s most significant regulatory initiatives aimed at simplifying the sustainability rulebook — and leaves businesses facing continued uncertainty about the scope and timing of core reporting and due diligence laws.

Background: A central pillar of the EU’s “Simplification Agenda”

The Omnibus I proposal, first presented by the European Commission in February 2025, forms part of its plan to streamline ESG-related legislation, reduce administrative burdens, and align reporting frameworks such as the CSRD, CSDDD, EU Taxonomy, and CBAM.

The rejected compromise — prepared by the Parliament’s Legal Affairs Committee (JURI) — would have allowed trilogue negotiations to start immediately without a plenary vote. It included two key scope adjustments:

• Corporate Sustainability Reporting Directive (CSRD): threshold raised to companies with ≥ 1,000 employees or €450 million turnover (up from 250 employees).
• Corporate Sustainability Due Diligence Directive (CSDDD): threshold raised to ≥ 5,000 employees and €1.5 billion turnover, with a stronger risk-based approach focused on direct suppliers and high-impact activities.

Supporters argued that these revisions would make the framework more proportionate and realistic for mid-sized companies. Critics warned they would weaken the EU’s sustainability ambition and limit access to comparable ESG data.

What happens next

Because the compromise was rejected, the plenary will now vote directly on the package, expected on 13 November 2025. Members of Parliament may propose amendments before that date, leaving the final scope open to further change.

Until Parliament agrees on a position, the trilogue negotiations with the Council and Commission cannot begin — delaying the adoption of the Omnibus I regulation and any resulting simplifications to the CSRD and CSDDD frameworks.

Implications for companies

For businesses preparing sustainability reports or due diligence processes, the rejection means:

• No immediate simplifications. The current CSRD and CSDDD texts remain the reference point.
• Continued uncertainty over thresholds, timelines, and disclosure expectations.
• Implementation should continue as planned, focusing on data quality, double materiality assessments, and integration of due diligence procedures.
• Digital readiness remains key — especially as ESRS 1 and 2, VSME guidance, and future taxonomy amendments are expected to be finalised in parallel.

Broader outlook

The debate highlights growing tension between the EU’s competitiveness agenda and its sustainability objectives. While many policymakers call for reduced reporting burdens, investors and civil-society groups emphasise the need for comparable, reliable ESG data to maintain Europe’s credibility as a global sustainability leader.

For companies, this phase of uncertainty underscores the importance of agile ESG data management and continuous monitoring of regulatory updates.

At EQS, we are preparing to integrate all finalised Omnibus I changes directly into the EQS Sustainability Cockpit, ensuring that once adopted, clients can adapt seamlessly to the updated reporting and due diligence frameworks.

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