The European Union is set to merge three key sustainability regulations – the Corporate Sustainability Due Diligence Directive (CS3D), the Corporate Sustainability Reporting Directive (CSRD), and the Taxonomy Regulation – into a single omnibus legislation.
This initiative, announced by European Commission President Ursula von der Leyen, intends to harmonise obligations, addressing redundancies and overlaps in data collection in order to ease compliance burdens for affected businesses. The move comes in response to the Budapest Declaration, where EU heads of state called for a “simplification revolution” and a 25% reduction in reporting requirements in the first half of 2025. It also aligns with recommendations from Mario Draghi’s report on European competitiveness.
Omnibus legislation has already been used in the past for consumer protection legislation or to transform certain parts of the Common Agricultural Policy1. The current consolidation effort will face technical challenges, as the three above-mentioned regulations have different scopes and apply to different sets of companies.
While Ursula von der Leyen insisted that the substance of these laws would be maintained, the Commission may not be able to control what happens next once the legislative process is reopened. “The Commission will table a legislative proposal, and then it’s a free-for-all for the Parliament and the Council,” warns Nicolas Lockhart co-head of ESG at law firm Sidley Austin2, because both bodies could propose significant amendments.
This concern is particularly relevant following recent precedent, where MEPs pushed through unexpected changes to the EU Deforestation Regulation. An according to Corporate Europe Observatory, the goal to reduce corporate reporting obligations by 25% will not be possible without touching the “essence” of regulations3 .
