Divided European Parliament set to vote on EU Omnibus on April 1

The first vote to approve the EU’s controversial omnibus directive will take place on April 1 in the European Parliament, which has been extremely divided on the topic.

It’s very hard to predict which way the vote will go, as the first debate on the EU Commission’s proposed omnibus regulation to simplify – or, as many see it, deregulate – sustainability requirements for European companies revealed deep divisions and discontent on both sides.

‘Regulatory schizophrenia’ for the left

For those on the left, the omnibus – which would reduce the number of companies having to report on their sustainability impacts under the Corporate Sustainability Reporting Directive (CSRD) from 50,000 to just 5,000, as well as drastically reducing the scope of the Corporate Sustainability Due Diligence Directive (CSDDD) – is seen as a “great wave of deregulation”.

Dutch MEP Lara Wolters, who oversaw the development of CSDDD, gave a passionate speech at the EU Parliament on March 10, where she called the EU omnibus “regulatory schizophrenia that's going to end up increasing compliance costs”. 

“Companies have already invested in sustainability, and now the commission is pulling the rug from underneath their feet. I think this is the kind of nonsense that can only be come up with when people go on what must be an ideological crusade and that at breakneck speed, refusing to consider real evidence or with a public consultation, and truly, the European Commission should be ashamed of this proposal,” she added.

Her speech echoed the sentiment of many sustainability-minded leaders who participated in the years of consultations to draft and approve the EU’s flagship sustainability regulations – only to be left out when the Commission decided to reopen them after the June 2024 election.

‘A cosmetic change’ for the right

Meanwhile, right-wing MEPs also criticised the draft, but for not going far enough. For example, Polish MEP Joachim Stanisław Brudziński called the omnibus “a step in the right direction, but a very small step”. 

“The omnibus initiative is shallow. We have to throw a lot of directives into trash where they belong. There is a lot of work ahead of us to get rid of the unnecessary burdens from our economy: the omnibus proposal needs to be amended and extended,” he added.

In the corporate world, opinions are also divided. Investors have expressed their wish for widespread sustainability disclosures to be maintained, noting that consistent data from companies is crucial in reorienting capital towards the European Green Deal.

Eleven major companies including Primark, Unilever and Nestlé have also stood against the omnibus proposal, and in favour of CSRD and CSDDD, arguing that these regulations “have the potential to drive long-term resilience and value for European businesses in support of competitive advantage”.

But while no company has come out publicly in favour of the proposal, oil and gas associations have welcomed it, calling it “a timely opportunity to readjust course”.