The Omnibus Simplification Package: Burden Release at the Cost of Transparency?

Abstract

Sustainable development has become a global priority, and the EU has responded with an increasingly stringent and standardized regime to regulate corporate sustainability practices. However, these directives have also received criticism from both companies and member countries. To ease the burden of companies and increase competitiveness, the EU presents the Omnibus Simplification Package I in early 2025 which simplifies requirements in key sustainable directives.

This article examines current sustainable reporting challenge and predicts the possible effect of the EU Omnibus Simplification Package I. First, drawing on the sustainability reports of three large companies from different industries, I found that, under current strict sustainable directives, they have conducted practices to obscure their adverse performance. Second, though the implementation of simplification package can release corporate's burdens, its over-simplified provisions may exacerbate current reporting situation. Additionally, if the simplification package been implemented, companies may avoid their sustainable obligations through four predictable approaches: managing to stay below the threshold applicable, taking intense activity only near the assessment year, maintaining or even intensifying current practice to construct a green image and avoid penalty through litigation over "uneven" fines.

Keywords: Omnibus Simplification Package, Over-simplified, Sustainability reporting, ESG, Regulatory capture