Stop the Clock? – Responsibility Doesn’t Come with a Cut-off Point

The European Commission’s Omnibus Package aims to reduce the reporting burden on businesses. While some in the corporate world welcome the move, it raises questions about transparency and climate commitments.

On 26 February 2025, the European Commission unveiled the Omnibus Package, proposing significant easing of sustainability reporting and supply chain due diligence requirements. The draft will be negotiated in the European Parliament and with member states in the coming weeks.

With the slogan "Stop the clock!" officials in Brussels confidently announced their intent to free businesses from unpopular sustainability reporting under the CSRD, Taxonomy, CSDDD, and CBAM. Most affected companies will get a reprieve until 2028, and the scope of obligations will shrink by 80%, dramatically reducing the number of firms required to report. Many businesses will no longer face pressure to disclose their sustainability practices for the 2025 financial year, while mid-sized firms are set to be exempt altogether. The Commission’s message is straightforward: cutting red tape and simplifying regulations to keep the EU globally competitive.

Reactions have been mixed. Sustainability professionals are largely debating among themselves about what they see as a major rollback of transparency rules and a weakening of the Green Deal. Meanwhile, large business associations are applauding—again, mostly among themselves—believing policymakers have finally seen sense. And then there are those who think the changes don’t go far enough. They had hoped for substantial content-based rollbacks rather than further drawn-out regulatory reviews.

There are arguments on both sides, but the louder the debate gets, the less people seem to listen to each other.

In a period of economic uncertainty, looming trade wars, and fierce global competition, governments need to be able to reassess priorities. Last year, Germany’s Ministry of Justice, then under FDP leadership, estimated that compliance with CSRD from 2028 would cost the country nearly €1.6 billion annually. That’s a figure policymakers can’t just ignore. The question of cost versus benefit has been raised time and again—does it really make sense for a company with little commitment to sustainability to meticulously report on its lack of progress?

On the other hand, what about the issue of greenwashing, which CSRD was meant to stamp out once and for all across the EU? That goal now looks increasingly out of reach, as voluntary reporting standards are unlikely to match the depth of CSRD requirements. That said, companies will still be bound by the Green Claims Directive. CSRD would also have made sustainability efforts—or lack thereof—among competitors more obvious, encouraging further progress. It’s also worth asking whether loosening regulations is the right response when major fossil fuel companies, banks, and financial institutions have recently been quietly walking back their own decarbonisation targets.

Then there’s the particularly sensitive issue of changes to CSDDD. By narrowing its focus to direct business relationships, transparency around supply chains will be significantly reduced. Companies will find it easy to obscure issues by funnelling operations through intermediary trading firms, cutting off visibility where previously malpractice could be identified.

So, is all this effort wasted?

Efforts so far have not been in vain. Many aspects of CSRD reporting have provided valuable knowledge for businesses, which they can continue to use strategically. The Commission has also made clear that the EU’s climate targets remain unchanged and will still require solid sustainability plans from industry. Scrapping reporting requirements does not mean the obligation to achieve climate neutrality has disappeared. Companies have their own reasons to stay on course—rising CO2 prices make investment in decarbonisation a straightforward business decision. Future-proofing a company still depends on making sustainability a core part of operations. Smart business leaders will reinvest what would have been spent on compliance—€1.6 billion annually in Germany alone—into their own long-term resilience. After all, aligning sustainability with profitability is the way forward, not setting them at odds.

Beyond corporate interests, there is a broader question of responsibility. Two things are clear:

1. Responsibility isn’t something you can opt out of—we all have a role to play.
2. Climate change won’t wait just because we say "Stop the clock!" Talking about action isn’t the same as taking it.

This opinion piece was originally published on Haufe.de on 11 March 2025.