What's Happening?
On October 22, 2025, the European Parliament voted against adopting a negotiating mandate on the European Commission's Omnibus Directive. This directive aimed to simplify sustainability reporting and due
diligence obligations under the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). The vote was narrowly defeated, with 309 in favor, 318 against, and 34 abstentions, highlighting divisions among Members of the European Parliament (MEPs) regarding the extent of proposed simplifications. The Legal Affairs Committee had drafted a resolution to set the Parliament's position, which included raising scope thresholds for CSRD and CSDDD, among other changes. However, the draft failed to secure enough support.
Why It's Important?
The rejection of the negotiating mandate prolongs uncertainty for companies preparing for compliance with CSRD and CSDDD. The decision impacts businesses across Europe, as they must continue planning for multiple compliance scenarios. The upcoming vote in November will be crucial, as it will determine whether a coalition between centrist and right-wing groups can form to support the directive. This decision affects corporate sustainability practices and reporting standards, influencing how businesses operate within the EU.
What's Next?
The Omnibus package will return to the European Parliament plenary session from November 11-13, 2025, for a full vote and possible amendments. Only after the Parliament adopts its position can trilogue negotiations with the European Commission and the Council of the European Union begin. Businesses are advised to monitor developments closely and prepare for various compliance scenarios.
