EU Ombudsman Probes Commission’s Sustainability Rollback

The EU Ombudsman, Teresa Anjinho, has launched an official inquiry into the European Commission’s recent Omnibus proposal, which seeks to reduce and simplify corporate sustainability reporting and due diligence obligations. This move comes after a coalition of environmental and human rights organizations lodged complaints alleging that the Commission failed to adhere to required procedural standards during the drafting of these proposals.

In late February 2025, the European Commission unveiled its Omnibus I package, which is intended to ease the regulatory burden on companies by amending several key regulations. These include the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), the Taxonomy Regulation, and the Carbon Border Adjustment Mechanism (CBAM). The changes proposed under the Omnibus I package are substantial and represent a shift in how sustainability and due diligence responsibilities will be applied across businesses operating in the EU.

One of the most significant changes proposed involves the CSRD, where the scope would be narrowed to apply only to companies with over 1,000 employees and a net turnover exceeding €50 million. This adjustment is expected to exclude approximately 80% of companies currently subject to sustainability reporting requirements, dramatically shrinking the number of businesses obligated to provide such disclosures. Similarly, the CSDDD would see human rights and environmental due diligence requirements limited to only direct business partners, rather than the broader value chain, and due diligence monitoring would be required less frequently. The Omnibus package also suggests placing restrictions on sustainability information requests for smaller companies, ostensibly to reduce administrative pressure.

The inquiry by the Ombudsman is in direct response to complaints filed by a coalition of eight organizations: ClientEarth, Notre Affaire À Tous, Clean Clothes Campaign, European Coalition for Corporate Justice, Global Witness, Transport & Environment, Antislavery International, and Friends of the Earth Europe. These groups contend that the Commission failed to comply with the European Union’s “Better Regulation Guidelines,” which are a set of principles designed to ensure transparency, thoroughness, and stakeholder engagement in the legislative process. Specifically, the complainants argue that the Commission neglected to conduct a public consultation and did not undertake a proper impact assessment before advancing the Omnibus proposals.

In addition to these procedural concerns, the coalition criticized the Commission for not carrying out a climate consistency assessment. This type of assessment is mandated by the European Climate Law and requires the Commission to evaluate whether new policies align with the EU’s ambitious 2050 climate neutrality target. The absence of such an assessment raises serious questions about whether the Omnibus proposals support or undermine the EU’s long-term environmental goals.

In a letter addressed to the President of the European Commission, Teresa Anjinho highlighted that this was the third recent complaint her office had received relating to the Commission’s compliance with legal and procedural requirements in legislative preparation. She stressed that these complaints collectively raise significant issues that warrant careful scrutiny by the Ombudsman. As part of the inquiry, Anjinho has asked the Commission to explain the rationale behind its decision to bypass a public consultation for this proposal and requested details about the meetings held in February 2025 with companies and other stakeholders involved in shaping the Omnibus package.

Moreover, the Ombudsman is seeking clarification on the urgency cited by the Commission for foregoing a detailed impact assessment and whether a climate consistency assessment was conducted at all. These questions aim to uncover whether due process was followed and if the Commission properly weighed the environmental and social consequences of its proposals.

Following the announcement of the Ombudsman’s inquiry, the coalition of eight organizations issued a statement emphasizing the importance of this intervention. They expressed that the swift action taken by the Ombudsman underscores the gravity of their concerns. The groups criticized the Commission for what they described as a rushed attempt to roll back critical elements of the European Green Deal, which includes a series of policies aimed at addressing environmental degradation and human rights abuses linked to global supply chains.

The coalition argued that the Commission’s proposals neglect the rights of both people and the planet by diluting the standards meant to promote corporate accountability and sustainable business practices. They see the Omnibus package as a dangerous step backward that weakens the EU’s leadership in sustainability and risks undermining years of progress toward more responsible corporate behavior.

This inquiry by the EU Ombudsman represents a critical checkpoint in the legislative process, potentially influencing whether the Omnibus proposals will proceed in their current form. It also highlights growing tensions within the EU about how best to balance regulatory burdens on companies with the urgent need to address climate change, environmental sustainability, and human rights. As the EU continues to pursue its Green Deal objectives, the outcome of this inquiry may shape the future of corporate sustainability regulation across Europe and beyond.