EU: Omnibus Simplification Package - A Setback for Sustainability?

The European Commission has recently unveiled its Omnibus Simplification Package, the first in a series of initiatives aimed at reducing bureaucratic burdens for businesses. While the package claims to uphold the goals of the Green Deal, it significantly weakens corporate accountability in sustainability reporting. As an impact-driven company that actively promotes sustainability and the circular economy, we are deeply concerned about the implications of this proposal. Instead of reinforcing sustainability efforts, the package risks watering down crucial environmental standards and creating more loopholes for businesses to avoid meaningful climate action.

What is the Omnibus Simplification Package?

The Omnibus Simplification Package is an attempt by the European Commission to ease regulatory burdens on businesses by modifying multiple laws simultaneously. The goal is to reduce administrative costs by 25% overall, and at least 35% for SMEs by 2029. This package covers various aspects of sustainability and corporate responsibility, including:

• Sustainable finance reporting
• Sustainability due diligence
• EU Taxonomy
• Carbon Border Adjustment Mechanism (CBAM)
• European investment programmes

While the Commission argues that this package will improve competitiveness, the reality is that weakening sustainability reporting will hinder progress towards a greener economy. A lack of clear and enforceable reporting standards means businesses can opt out of disclosing their environmental impact, making it harder to measure progress, hold companies accountable, and achieve real sustainability.

The Key Changes and Their Impact

CSRD (Corporate Sustainability Reporting Directive)

One of the most contentious aspects of the package is its revision of the CSRD, which significantly reduces the number of companies required to report sustainability data:

• New threshold: Only companies with more than 1,000 employees must comply (previously, the threshold was two out of three criteria: >250 employees, >€50 million turnover, or >€25 million balance sheet total).

This means a drastic reduction in coverage: Around 80% of previously included companies will now be exempt.

• Simplified reporting standards: Companies that remain within scope will face fewer and less complex reporting requirements.
• No reasonable audit assurance: A weaker framework for auditing sustainability reports.
• Voluntary reporting option available: Companies no longer covered by the directive can still report under a voluntary updated standard, similar to the VSME standard.

For refurbed, and other companies like us, this means we are no longer subject to CSRD reporting.

EU Taxonomy

Changes to the EU Taxonomy Regulation also reduce reporting obligations for companies:

• Higher thresholds: Only companies with more than 1,000 employees and a net turnover of >€450 million must comply.
• Voluntary compliance for smaller businesses: Companies that do not meet the threshold can opt-in voluntarily.
• Simplified criteria: The technical screening criteria for sustainable economic activities and reporting templates have been reduced and simplified.

For refurbed, this means we are also no longer required to report under the EU Taxonomy.

So, why are we upset if it means less work for us? For two reasons:

1. This legislative U-turn punishes impact-driven companies like us, who have done their homework, have already started their reporting and spent considerable resources so the outcome would be as good as it can be.
2. The legal uncertainty and the weakening of sustainability standards will have long-term negative consequences for all of us. Here’s why.

What this means for sustainability accountability

These changes represent a major step backward for corporate sustainability reporting in Europe. By significantly reducing the number of companies required to report, the EU risks losing transparency and accountability in corporate environmental and social governance (ESG). Even some large industry associations have voiced concerns, emphasizing the need for legal certainty and predictability in sustainability regulations.

This proposal also sends the wrong signal to companies that have already invested in sustainability initiatives. Businesses that have been diligently working on ESG reporting now face uncertainty and shifting goalposts, which could discourage further investments in sustainability.

Voluntary Reporting is Not Enough

We cannot rely on voluntary actions to fight climate change—this is a global and complex problem that requires collective action. While some companies may choose to report their sustainability impact voluntarily, history has shown that market forces alone will not drive the necessary transformation. Without enforceable regulations, companies that prioritize sustainability will be at a (short-term) disadvantage compared to those that continue business as usual.

Becoming aware of one's impact is only the first step in mitigating environmental harm. If we are serious about tackling climate change, we need clear rules that apply to everyone, not just voluntary commitments that allow freeriding. The shift away from mandatory reporting risks rewarding those who ignore sustainability while penalizing those who are proactive in reducing their environmental footprint.

To learn more about refurbed commitment to sustainability, check sustainability.refurbed.ie.