Developments across the EU Council and Parliament indicate that a compromise on the Omnibus is still far away.  This coming week, the EU Council is due to meet to discuss changes to the sustainability regulations – though pre-released documents indicate that a consensus is not yet in sight. The EU Parliament is similarly divided, with its ECON Committee proposing deeper cuts to the suite of regulations than those in the Omnibus draft.

Despite this division, the financial and corporate sector are becoming increasingly unified in their opposition to this Omnibus – with the EU central bank and responsible investor networks warning against further slashes to the bloc's sustainability agenda.

Upcoming Events

Fair Labor Association Report Launch: Toward Promoting Human Rights in the Leather Supply Chain in Brazil

Join the Fair Labor Association (FLA) and human rights consultancy Impactt for a public webinar reviewing findings of a new report that highlights areas of concern and risk factors within Brazil's leather industry. During the webinar, speakers will share recommendations on how companies can improve transparency and develop effective social and environmental parameters for the leather upstream supply chain.

Amfori webinar series "Due diligence laws in practice": "How CSDDD aligns with international due diligence standards"

In this webinar, amfori promises to 'provide practical insights into how the CSDDD aligns with these global frameworks.' It will explore key areas of convergence, examine areas where alignment may be shifting as a result of some of the EU’s Omnibus simplification package proposals, and offer guidance on how companies can best prepare to meet emerging regulatory expectations.

Corporate Sustainability Due Diligence Directive (CSDDD)

Updates:

On Monday the 19th of May, the Council of Europe and EU member states are due to meet to discuss final changes to CSRD, CS3D and Taxonomy.

In the leadup to the meeting, the Council Presidency has prepared the second compromise text to frame the discussions, available here.

According to Richard Gardiner, ‘this text does not advance the discussions much & potentially Member States will need political guidance from EU ambassadors in COREPER to try and find a compromise.’

The EU parliament’s ECON Committee has published its Omnibus amendment proposals, prompting concerns about the direction of the body.

The European Parliament’s Committee on Economic and Monetary Affairs (ECON Committee) draft proposal suggests the body may recommend significant reductions in the number of companies required to comply with the EU’s sustainability reporting and due diligence regulations.

According to Andres Rasche the publication does not 'paint a promising picture for reaching a comproise on the Omnibus', with its main suggestions being to align the scope for the CSRD and CSDDD around a 3,000 employee threshold (and EUR 450 million turnover) and eliminate obligations to adopt climate transition plans for the CSDDD.

The Commission has responded to the UN Working Group on business and human rights criticism of the Omnibus Simplification package.

The Commission claims that Member states will keep companies accountable despite removal of EU-wide civil liability regime for due diligence legislation.

The financial sector, including the EU Central Bank and responsible investor networks, responds to the EU Commission’s Omnibus approach.

On the 8th May, the EU Central bank published an opinion, warning against the EU removing 80% of companies from Mandatory Sustainability Reporting.

UNPRI published a policy briefing on the Omnibus I European Commission proposal. The position paper, ‘details specific recommendations from the responsible investor perspective on the proposal, seeking ‘to simplify and improve the coherence of the EU sustainable finance framework while preserving its core principles.’

See Valentina Orena’s update on the broad range of corporate stakeholders supporting the Omnibus.

30 of Europe's leading legal scholars, signed an open letter, warning against the direction of the EU's Omnibus Package

The academics claim that the current approach is ‘undermining legal certainty, creating litigation risk, and contributing to the fragmentation of the EU's internal market.’

Notes/Further Reading:

Andreas Rasche’s outline of key future dates on the EU Omnibus, provides critical updates for this year

Implementation timeline:

  • October 2025: Planned vote on the Omnibus in the Plenary of European Parliament (date TBC)
  • Late 2025-2026: Trilouge on Omnibus (Parliament, Council and Commission) to negotiate final legal text.
  • From 2028 [delayed]: Companies with 5,000+ employees and a net turnover of 1 ,500 million EUR must comply.
  • From 2028 [unchanged]: Companies with 3,000+ employees and a net turnover of 900 million EUR must comply.
  • From 2029 [unchanged]: Companies with 1,000+ employees and a net turnover of 450 million EUR must comply.

EU Deforestation Regulation (EUDR)

Updates:

EU set to blacklist only four countries as ‘high risk’ under the EUDR

According to a list shared with member states last week, only Belarus, North Korea, Myanmar, and Russia will be included in the highest category of risk.

Meanwhile, allegedly the US, China and EU Member states will likely be labelled as ‘no risk’ countries.

Further Reading/Listening:

Santander accused of funding vast deforestation, labelled by campaigners as ‘ecocide’

Reporting by Global Witness uncovers that the bank provided more than $600m in financing to firms linked to beef, palm oil, soya and supply chains driving deforestation.

Financial Times newsletter: How the EU deforestation law aggravates the trade dispute with the US

Despite the EU allegedly categorising the US — and all its own members — as “low risk”, meaning that there will be fewer checks on US, American producers claim that the bureaucratic hurdles were still too high.

The association claims that the postponement of the regulation, which many viewed as a concession to industry demands, “does not solve [their] concerns with the regulation’s complex requirements and significant technical barriers."

Implementation timeline:

30 June 2025: Country benchmarking act adopted. Obligations stemming from the regulation will be binding from:

  • 30 December 2025: for large operators and traders
  • 30 June 2026: for micro- and small enterprises

EU Forced Labour Regulation (EUFLR)

Update: None

Further Reading: None

Implementation timeline:

  • 2026: EU Commission to publish guidelines, including a forced labour risk database.
  • 14 December 2027: law becomes applicable.

Uyghur Forced Labor Prevention Act (UFLPA)

Updates: None

Further Reading/Listening: None

Disclaimer: This newsletter is for general informational purposes only. It does not, and is not intended to, constitute legal advice.