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The Omnibus Simplification Package talks wrapped on Monday, December 8, after negotiations pushed into overtime. The resulting decision — a major legislative win for European Commission President Ursula von der Leyen — adopted several of the Parliament’s aggressive simplification measures while settling for the Council’s numbers on scope.
This week marks a decisive moment in the EU’s regulatory calendar. European Parliament, the Council of the EU, and the Commission convened for what was scheduled to be the final trilogue on the Omnibus Simplification Package. The goal was to finalize a deal that delivers on the mandate to reduce administrative burden — by as much as 25% — before the year is out.
While the “stop-the-clock” directive earlier this year already provided breathing room for reporting deadlines, the provisional agreement reached on Monday addresses the structural substance of the EU’s Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) to “create a more favorable business environment to help our companies grow and innovate,” said Marie Bjerre, Minister for European affairs of Denmark, which holds the presidency of the Council until the end of the year.
De-Regulation
Since the European Commission proposed it last February, the Omnibus has sparked a year of intensive negotiations between EU decision-makers, who have argued over how much to reduce reporting and due diligence obligations for companies on the sustainability impacts of their operations and supply chains. Finally, in their negotiating positions, the Council and the European Parliament have taken substantially diverging stances from the Commission’s original proposal.
Going into Monday’s session, the gap between the institutions was stark as they debated critical “simplification” levers that could fundamentally alter the scope of the CSRD and CSDDD. Here is what was agreed in the final trilogue:
The “Super-Thresholds”
The trilogue settled on the Council’s preferred CSRD thresholds: 1,000 employees and €450M net turnover, effectively freeing thousands of middle-market companies from mandatory reporting. The net turnover threshold for non-EU companies has also been increased to €450 million generated in the bloc. Importantly, negotiators agreed to exempt the so-called “wave one” companies from reporting in 2025 and 2026, freezing the timeline for the EU’s largest players until 2027.
Additionally, only the largest companies will be covered by the supply chain due diligence obligations — the compromise increases the CSDDD thresholds to 5,000 employees and €1.5 billion in net turnover. The rules will also apply to non-EU corporations with EU turnover above the same amount.
The “Risk-Based” Cap
Ultimately, the duty to map the entire supply chain has been lifted in favor of a scoping exercise. The exclusive focus on direct business partners (“Tier 1”) has also been removed. Instead, companies should “focus on the areas of their chains of activities where actual and potential adverse impacts are most likely to occur.” At the same time, when adverse impacts are equally likely or equally severe in several areas, companies are given “the ability to prioritise assessing adverse impacts which involve direct business partners.”
Climate Transition Plans Deleted
In a victory for the pro-simplification bloc and business lobbies, the mandatory requirement for climate transition plans — with details on how companies intend to adapt their business models to reach net-zero targets — has been removed from the CSDDD.
Civil Liability, Penalties and Transposition
Agreeing to a review clause on civil liability, the decision-makers also removed the EU-harmonized regime that allowed civilians to hold companies accountable for the adverse impacts of their supply chains. Regarding penalties, a maximum cap of 3% of a company’s turnover was agreed upon, subject to the Commission issuing the necessary guidelines. Finally, the co-legislators agreed to move the CSDDD’s transposition deadline by a year, to 26 July 2028, giving companies until July 2029 to comply with the new rules.
What Happens Next?
The three institutions are moving quickly to validate the deal: The Council’s confirmation in Coreper II is slated for December, and a vote in the Parliament’s Legal Affairs Committee (JURI) is scheduled for the day after, while the final adoption in the Parliament plenary is scheduled for December 16.
For companies, while the Omnibus deal offers regulatory relief, the core strategic question remains: will they let market forces drive your sustainability efforts, or will they seize this opportunity to strengthen corporate resilience? The mandate to reduce administrative burden may be met, but the market’s demand for transparency and resilience continues.
A strong due diligence program remains the basis for better risk management, operational efficiency, and a demonstrable competitive edge. Beyond simple compliance, using CSDDD data enables you to proactively identify and mitigate ESG risks, meet the needs of institutional investors, and ultimately improve your cost of capital. Furthermore, leveraging this data can inform R&D for low-carbon products and differentiate your brand to customers and public procurement bodies who increasingly use ESG criteria for supplier selection.
By maintaining investment in due diligence and reporting, you can transform compliance costs into long-term strategic benefits.
Want to learn more about how the Omnibus Simplification Package impacts your business? Register for our 3-part webinar series.