As a key part of the EU’s Competitiveness Compass, the Omnibus Simplification Package aims to streamline corporate sustainability reporting by introducing changes to:
The draft proposal, released on February 26, 2025, has already sparked significant debate.
A major concern comes from businesses that have invested heavily in compliance, with companies like Primark, L’Occitane, Nestlé, and NEI Investments urging the Commission not to weaken sustainability reporting standards, warning that such changes could undermine business certainty and investment.
Although the Omnibus Package has progressed with key delays approved in March 2025, it is still a proposal and must go through political negotiations before becoming law and fully imposing the outlined changes.
The extension of timelines for CSRD compliance and CSDDD transposition provides clarity for Wave 2 companies on when they must prepare for compliance. This two-year gap presents a valuable opportunity to avoid a rushed and expensive last-minute scramble — start preparing your systems in 2025. More on that later – for now, let’s take a look at what we know so far about the proposal.
On 26 March 2025, member states' representatives (Coreper) approved the Council’s position on the Commission's 'Stop-the-clock' directive, a key part of the Omnibus Simplification Package.
As part of this update, the Council agreed to delay:
The entry into application of the CSRD for large companies that have not yet begun reporting, as well as for listed SMEs, by two years, extending the deadline to 2028.
The transposition deadline and first-phase application of the CSDDD, covering the largest companies, by one year, now set for 2027.
These extensions are aimed at providing businesses with more time to prepare for compliance and allowing for further negotiations on substantive changes to the CSRD and CSDDD, which are part of the ongoing Omnibus I package.
While some EU governments, such as France and Germany, have recently called for delays and amendments to CSRD, the Omnibus Simplification Package has sparked growing opposition from businesses, investors, policymakers, and climate advocates.
Climate activists and researchers warn that the Omnibus initiative risks weakening EU climate commitments. An open letter from 240 European researchers, mainly economists, cautioned that regulatory “simplification” may lower ambition, undermining the European Green Deal.
Moreover, more than 200 European financial firms and investors have also warned that loosening sustainability rules reduce investor confidence in EU markets.
A key concern comes from businesses that have already invested heavily in compliance, as they are restructuring teams, training employees, and developing sustainability frameworks.
However, the European Commission claims that the goal of the Omnibus Simplification package is not to change the content and goals of the regulations but to simplify them.
The Omnibus Simplification Package introduces significant changes to EU sustainability regulations, aiming to reduce compliance burdens. While simplification was desired by a lot of companies, the discussion has now shifted towards whether or not this is deregulation. Whichever side of the debate you fall on, reducing the number of companies required to report means that fewer businesses will engage with this process, limiting the availability of industry-wide data needed for effective decarbonization.
Sustainability reporting is not just a compliance exercise — it is a tool for fashion brands to understand and manage their environmental impact. For example, the ESRS asks fundamental questions that help companies evaluate their sustainability performance across multiple indicators.
When leadership teams feel overwhelmed by sustainability reporting, it often reflects a deeper issue: a lack of clarity about their company’s impact. Just as financial reporting has long been a business standard, sustainability disclosures like those under the Corporate Sustainability Reporting Directive should be seen as essential business insights, not just regulatory obligations.
Read our CSRD fashion deep dive here.
Read our CS3D fashion deep dive here.
Read all about these changes in the European Commission’s questions and answers on simplification omnibus I and II.
While brands technically have until 2027/2028 to fully comply with the CSRD and thE CSDDD, waiting until the last minute to decide on a solution significantly increases the risk of non-compliance.
Waiting until closer to the deadline leaves limited time to gather and clean upstream data — a process that typically takes at least a year. Supplier data is often incomplete or inconsistent, and you may need to integrate complex systems like Product Lifecycle Management (PLM) to ensure full visibility. Rushing this work increases the likelihood of missing critical information and results in last-minute fixes that can be costly and inefficient.
By preparing your systems in 2025, you can avoid a rushed and expensive scramble. Getting ahead of the curve allows for smoother data collection, integration, and reporting processes, helping to ensure that you meet compliance requirements without compromising quality or accuracy.
Our vision at Carbonfact is that, ultimately, different countries or regions will have their own regulations and methodologies. This will create a complex set of jurisdiction-based rules and norms that companies must navigate. This is where software can help.
Our software acts like a bridge that simplifies all these different rules and methods. It helps companies by automatically applying the right rules and methods for each situation, so they don’t have to worry about the complexity of dealing with different regulations from around the world.
Here’s how:
By getting started with our platform today, you're not just checking compliance boxes – you're gaining actionable insights that drive smarter decisions about your environmental impact, no matter when the reporting deadlines ultimately fall.