EU Omnibus Proposal: What it Means for Procurement

The European Commission’s proposed omnibus simplification package aims to reduce the regulatory burden on businesses, with significant implications for procurement. The changes would remove around 80% of companies from the scope of the Corporate Sustainability Reporting Directive (CSRD) and delay reporting obligations. The EU Taxonomy would also be limited in scope, aligning with the Corporate Sustainability Due Diligence Directive (CSDDD).

If adopted as planned, these measures could generate savings of approximately €6.3bn ($6.6bn) and unlock €50bn ($52bn) in investment capacity. For procurement professionals, the impact will be substantial, affecting sustainability reporting, supply chain due diligence and emissions-related requirements under the Carbon Border Adjustment Mechanism (CBAM).

Regulatory adjustments and procurement implications

The omnibus proposal includes changes to several key regulations:

• CSRD (Corporate Sustainability Reporting Directive) – Currently, CSRD requires large companies to disclose detailed sustainability information. The proposed changes will remove most companies from its scope, reducing reporting obligations across supply chains.
• CSDDD (Corporate Sustainability Due Diligence Directive) – This regulation mandates large companies to assess and address human rights and environmental risks in their supply chains. The proposal simplifies due diligence requirements, potentially reducing the compliance burden on procurement teams.
• EU Taxonomy – A classification system that defines sustainable economic activities, the Taxonomy would be limited in scope, making sustainability reporting voluntary for some large companies.
• CBAM (Carbon Border Adjustment Mechanism) – This regulation imposes carbon costs on imported goods. The proposal exempts small importers and simplifies compliance requirements for companies still within its scope.

For procurement teams, these regulatory changes could mean fewer reporting obligations and lower administrative costs. However, there are concerns that relaxing sustainability requirements may weaken incentives for responsible sourcing.

Industry reactions: Efficiency vs sustainability

Ursula von der Leyen, President of the European Commission, describes the changes as a necessary step to balance sustainability with business efficiency. “Simplification promised, simplification delivered,” she says.

“This will make life easier for our businesses while ensuring we stay firmly on course toward our decarbonisation goals.”

The Commission expects these changes to encourage investment and simplify procurement processes across Europe.

Stéphane Séjourné, Executive Vice-President for Prosperity and Industrial Strategy, reinforces this perspective: “We are taking concrete steps to cut red tape and make EU rules more accessible and effective for citizens and businesses.”

However, industry experts have voiced concerns about the long-term consequences.

Lilianna Krawczyk, Senior Consultant at EY, warns that discrepancies in CSRD adoption across EU Member States could create new challenges.

She asks: “Will these entities need to prepare separate reports because their parent companies delay investments in consolidated reporting?”

Robin Hodess, CEO at GRI, is particularly critical of the impact on sustainability. “If the Commission aims to make European business more competitive then cutting the ambition of the CSRD is a backward step,” she says, stressing that sustainability data is crucial for innovation and investment.

From a supply chain perspective, Bindu Sukumarapillai, CEO of the Fairtrade Network of Asia Pacific Producers, argues that weaker due diligence requirements could leave suppliers vulnerable. “A CSDDD without civil liability and reduced fines for wrongdoings leaves farmers and their families with little,” she says. She warns that companies may simply switch suppliers rather than co-invest in long-term sustainability solutions.

Andreas Rasche, Professor at Copenhagen Business School, is also disappointed by the proposed changes. “This is very disappointing and not at all proportionate,” he says. “The EU has started to dismantle key Green Deal regulations that it spent much time on during the last five years.”

Next steps for procurement and sustainability

The European Commission has submitted the proposals to the European Parliament and Council for debate. If approved, the changes will take effect once co-legislators finalise agreements and publish them in the EU Official Journal.

The Commission urges lawmakers to prioritise sections postponing disclosure requirements under CSRD and delaying CSDDD implementation.

For procurement professionals, these regulatory shifts will require a reassessment of compliance strategies. Key proposed changes include:

• CSRD Adjustments:
  • 80% of companies removed from CSRD scope.
  • Postponed reporting obligations for companies in scope until 2028.
  • Smaller companies in supply chains protected from large-company reporting burdens.
• EU Taxonomy Modifications:
  • Reporting limited to the largest companies, with voluntary participation for others.
  • Reporting templates reduced by 70%.
  • Financial materiality threshold introduced for reporting.
• CSDDD Simplifications:
  • Due diligence requirements narrowed to direct business partners.
  • Reduced reporting frequency from annually to once every five years.
  • Limited information requests from small and medium-sized companies (SMEs).
  • EU civil liability conditions removed, protecting companies from excessive legal claims.
  • One-year delay in due diligence requirements for the largest companies.
• CBAM Adjustments:
  • Exemptions for small importers, covering 90% of businesses.
  • Streamlined authorisation and emissions reporting.
  • Stronger measures to prevent circumvention of CBAM obligations.

For procurement teams, these changes may simplify compliance efforts, particularly in sustainability reporting and supply chain due diligence. However, businesses that have already invested in robust environmental, social and governance (ESG) strategies may need to reconsider their approach.

Wopke Hoekstra, Commissioner for Climate, Net Zero and Clean Growth, acknowledges the balance between reducing bureaucracy and maintaining environmental standards.

“Today, we’re making it simpler to do business in Europe,” he says. “While exempting around 90% of companies from CBAM reporting, we still ensure the capture of over 99% of emissions.”

Procurement’s role in navigating change

The EU omnibus proposal presents procurement teams with both opportunities and challenges. On one hand, reduced reporting obligations and streamlined regulations could lead to cost savings and operational efficiencies. On the other, concerns remain about whether these changes weaken sustainability commitments across supply chains.

For procurement professionals, the focus now shifts to how businesses adapt to these regulatory updates while maintaining ESG standards. Those with well-established sustainability practices may continue voluntary reporting to meet investor and stakeholder expectations, while others may adjust strategies based on the new regulatory landscape.

Ultimately, as the European Parliament and Council debate the proposals, procurement teams must stay informed and prepared for the potential impact on sourcing, compliance and supplier relationships. Whether these changes prove beneficial or regressive will depend on how businesses choose to implement them in practice.

As Andreas puts it: “Yes, simplifications are needed… but what is suggested in this document does not simplify. It deregulates.”

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