EU Ombudsman Probes Sustainability Law Rollback

The European Ombudsman has launched a formal inquiry into the European Commission’s recent move to ease corporate sustainability laws, amid mounting criticism over the lack of transparency and public consultation in the legislative process. The investigation, triggered by a complaint from eight civil society organisations, comes in response to the Commission’s proposed “simplification omnibus” plan, which aims to scale back environmental and human rights obligations for businesses operating within the European Union.

Announced in February, the European Commission’s proposal seeks to reduce the regulatory burden on companies, particularly targeting small and medium-sized enterprises (SMEs). The plan includes measures that would exempt thousands of smaller firms from the obligation to file sustainability reports. In addition, it proposes less stringent due diligence requirements for larger corporations, especially regarding environmental and human rights impacts across their supply chains.

While the Commission has justified the move as a necessary step to ease compliance costs and improve the business environment, the proposal has sparked backlash from civil society organisations and transparency advocates. The primary concern is that the drafting process was carried out without adequate public consultation, raising serious questions about the governance, accountability, and fairness of the regulatory process.

The complaint submitted to the Ombudsman alleges that the Commission violated its own “better regulation” guidelines. These internal rules require the EU executive body to consult a wide range of stakeholders and conduct an impact assessment before presenting new legislative proposals. The complainants argue that the Commission failed on both fronts, instead opting for closed-door discussions with industry lobbyists, which they say resulted in a one-sided and opaque policymaking process.

Ombudswoman Teresa Anjinho confirmed that her office would be examining whether the Commission adequately followed established procedures. “The decision to open an inquiry follows a complaint by eight civil society organisations who argue that the Commission breached its better regulation guidelines by failing to justify why it did not carry out a public consultation or impact assessment on the draft legislation,” she stated.

The outcome of the Ombudsman’s inquiry could have significant implications for the future of the proposed legislation. If the Commission is found to have sidestepped its regulatory obligations, it may be forced to revise the proposal or subject it to broader scrutiny and consultation. This could delay the implementation of the regulatory relief measures and potentially reshape the final scope of the legislation.

Critics of the simplification plan warn that rolling back sustainability obligations at this stage sends the wrong signal to companies and the international community. They argue that the EU, which has positioned itself as a global leader in sustainability and corporate responsibility, risks undermining its credibility by relaxing its environmental and human rights standards under pressure from industry.

“The Commission’s proposal not only weakens essential safeguards but also compromises the democratic process by ignoring voices outside the corporate sector,” said one of the civil society groups involved in the complaint. They stressed that the decision to exclude public consultation from a legislative process with far-reaching implications is particularly concerning, as it deprives citizens, environmental groups, and other stakeholders of a say in shaping EU law.

On the other hand, business groups have largely welcomed the Commission’s plan, arguing that current reporting requirements are overly complex and disproportionately burdensome for smaller companies. They claim that reducing red tape is essential for economic growth and innovation, especially in a competitive global marketplace.

The Ombudsman’s role in the EU institutional framework is to investigate complaints about maladministration in the activities of EU institutions. Although the Ombudsman’s findings are not legally binding, they carry significant moral and political weight, and EU institutions often act on the recommendations issued.

As the inquiry progresses, all eyes will be on how the Commission responds to the growing scrutiny. The controversy surrounding the simplification omnibus plan underscores the delicate balance EU policymakers must strike between supporting economic competitiveness and upholding the bloc’s commitment to sustainability and democratic governance.

The Ombudsman’s office has requested detailed explanations from the Commission regarding the consultation and drafting process of the proposal. Depending on the findings, the Commission could be urged to revisit the process with greater transparency and inclusivity.

The investigation adds to the ongoing debate within the EU about the future of its green transition policies and the extent to which business interests should influence regulatory reform. For now, the outcome remains uncertain, but the inquiry marks a significant step in holding the European Commission accountable for the transparency and inclusivity of its policymaking.