FREE WHITE PAPER
EU Omnibus Regulation -
 Old Wine in New Bottle or New Wine in New Bottle?
This white paper examines the European Union’s Omnibus Regulation, which represents a pivotal evolution in the EU’s sustainability regulatory framework. By analyzing whether this regulation is merely a repackaging of existing rules or a genuine innovation, we provide stakeholders with crucial insights for strategic compliance planning. Our findings suggest that while the Omnibus Regulation builds upon established principles, it introduces transformative changes that will fundamentally reshape corporate sustainability practices across Europe and globally.
Introduction
The European Union stands as a global leader in sustainability regulation, continually refining its approach to ensure environmental responsibility and corporate transparency. The EU Omnibus Regulation represents a watershed moment in this journey—an ambitious attempt to streamline existing sustainability frameworks while maintaining their effectiveness.
This paper examines whether the Omnibus Regulation is simply “old wine in a new bottle”—a mere rebranding of existing regulations—or “new wine in a new bottle”—a genuinely innovative approach to sustainability governance. By analyzing its relationship with the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy for Sustainable Activities, we provide a comprehensive assessment of its impact on businesses within and beyond the EU.
The Current Regulatory Landscape
Corporate Sustainability Reporting Directive (CSRD)
Purpose and Philosophy
Comprehensive Scope
Rigorous Requirements
Implementation Timeline
Large public companies with 500+ employees (FY2024, reporting in 2025)
All other large companies (FY2025, reporting in 2026)
Listed SMEs, small non-complex financial institutions, and captive insurance companies (with opt-out until 2028)
Corporate Sustainability Due Diligence Directive (CSDDD)
The CSDDD creates a legally binding framework for proactive management of adverse impacts across global value chains.
Purpose and Philosophy
The CSDDD institutionalizes human rights and environmental due diligence as a legal obligation rather than a voluntary commitment. It operationalizes the United Nations Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises.
Strategic Scope
Companies must report on both impacts on sustainability matters and how sustainability issues affect the company |
Non-EU companies with €450M+ EU turnover |
Modified thresholds for companies in sectors with heightened risks
While directly applicable to approximately 5,000 companies, the due diligence requirements cascade through value chains, affecting millions of businesses worldwide |
Core Requirements
Identify, prevent, mitigate, and account for actual and potential adverse impacts
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Embed due diligence into policies, risk management, and decision-making processes
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Consultation with affected communities, workers, and other relevant parties
Establishing grievance mechanisms and providing remediation when appropriate
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Adoption of science-based plans aligned with the Paris Agreement
Phased Implementation
Companies must report on both impacts on sustainability matters and how sustainability issues affect the company
Non-EU companies with €450M+ EU turnover |
Modified thresholds for companies in sectors with heightened risks |
EU Taxonomy for Sustainable Activities
The EU Taxonomy serves as the foundation for the European sustainable finance architecture, providing a science-based classification system for environmentally sustainable economic activities.
Purpose and Philosophy
The Taxonomy creates a common language for sustainable finance, enabling capital markets to identify and support environmentally sustainable investments, thereby facilitating the transition to a low-carbon, resilient and resource-efficient economy.
- Â Financial market participants: Including asset managers, institutional investors, and banks
- Large public-interest companies: Subject to CSRD requirements
- EU and Member State authorities: When establishing public measures, standards, or labels
Purpose and Philosophy
The Taxonomy creates a common language for sustainable finance, enabling capital markets to identify and support environmentally sustainable investments, thereby facilitating the transition to a low-carbon, resilient and resource-efficient economy.
Technical Criteria Framework
- Climate change mitigation
- Climate change adaptation
- Sustainable use and protection of water and marine resources
- Transition to a circular economy
- Pollution prevention and control
- Protection and restoration of biodiversity and ecosystems
Detailed, science-based thresholds and metrics
Activities must not undermine other environmental objectives
Alignment with international standards such as the ILO Fundamental Conventions
Continuous Development Timeline
Climate Delegated Act (climate mitigation and adaptation) |
Complementary Climate Delegated Act (nuclear and natural gas) |
Environmental Delegated Act (remaining four objectives) |
Regular review and refinement of technical screening criteria |
The EU Omnibus Regulation: Evolutionary or Revolutionary?
Genesis and Motivation
The Omnibus Regulation emerges from a recognition that while individual sustainability regulations serve valuable purposes, their cumulative effect creates significant compliance challenges. This initiative responds to stakeholder feedback highlighting regulatory overlap, inconsistent terminology, and disproportionate burdens on smaller enterprises.
Transformative Objectives
The Omnibus Regulation aims to create a coherent sustainability framework by:
- Eliminating redundant reporting requirements across directives
- Harmonizing terminology and concepts
- Creating a unified compliance timeline
- Establishing a centralized data repository
Concrete targets for administrative relief include:
- 25% reduction in reporting requirements for large companies
- 35% reduction for SMEs
- Simplified verification procedures
- Proportionate implementation based on company size and risk profile
Rather than diluting sustainability objectives, the Omnibus approach seeks to enhance effectiveness through:
- Improved data quality through consolidated reporting
- Better resource allocation toward material issues
- Enhanced comparability of sustainability information
- More integrated connection between disclosure and due diligence
Key Innovations
The Omnibus Regulation introduces a unified approach to sustainability assessment that:
- Connects reporting obligations with due diligence processes
- Aligns impact assessment methodologies with Taxonomy criteria
- Creates a “comply once, report many times” model
- Facilitates interoperability across different reporting frameworks
Building on the European Single Access Point (ESAP) initiative, the regulation embraces digital transformation through:
- Standardized machine-readable formats
- Automated compliance checking
- Dynamic reporting capabilities
- Blockchain-based verification options
Recognizing diverse business realities, the regulation introduces sophisticated proportionality through:
- Risk-based reporting requirements
- Sector-specific materiality guidance
- Simplified standards for non-complex entities
- Progressive implementation pathways
The regulation positions EU standards within the international landscape by:
- Creating interoperability with ISSB standards
- Establishing equivalence mechanisms for third-country frameworks
- Supporting global convergence through the G7 and G20
- Facilitating mutual recognition arrangements
