The European Ombudsman has launched a formal investigation into the European Commission’s handling of its recent Omnibus proposals, which aim to significantly reduce sustainability reporting and due diligence obligations for companies operating in the EU.
According to ESG Today, the inquiry follows a complaint from a coalition of NGOs claiming the Commission failed to follow required procedures, including holding public consultations and conducting full impact assessments.
The Commission’s Omnibus I package, unveiled in February 2025, seeks to simplify regulatory requirements across several major frameworks including the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), the EU Taxonomy Regulation, and the Carbon Border Adjustment Mechanism (CBAM). Among the most controversial proposals is the plan to apply CSRD obligations only to companies with more than 1,000 employees and revenues above €50m, a change that would exempt around 80% of firms currently covered by the rules.
Under the new proposals, due diligence obligations under the CSDDD would be limited to direct business partners and would involve less frequent monitoring. The package also suggests placing restrictions on sustainability data requests made to small and medium-sized enterprises.
The ombudsman’s inquiry, led by Teresa Anjinho, follows complaints filed by a group of environmental and human rights organisations, including ClientEarth, Global Witness, Friends of the Earth Europe, and others. The group argued that the Commission failed to comply with its own Better Regulation Guidelines by omitting public consultation and not performing a climate consistency assessment, as required under the European Climate Law.
In a letter addressed to the Commission President, Anjinho revealed this is the third complaint received recently about the Commission’s legislative processes. She noted, “It is clear that the issues raised in these three complaints raise a number of important issues for the Ombudsman.”
As part of her inquiry, Anjinho has requested a detailed explanation from the Commission regarding its rationale for bypassing a public consultation, the extent of stakeholder engagement in February 2025, and the justification for not conducting a climate consistency assessment. The ombudsman also asked the Commission to clarify the “urgency” it cited in omitting a full impact assessment.
Responding to the announcement, the coalition of eight organisations behind the complaint stated, “This swift and decisive action by the EU Ombudsman underlines the importance of the issues raised in our complaint. The Commission’s rushed rollbacks of three key components of the Green Deal – including laws aimed at tackling the environmental and human costs of global value chains – has completely disregarded the rights of both people and the planet.”
The inquiry is set to intensify scrutiny over the EU’s ongoing attempts to ease regulatory burdens for businesses, especially when such efforts clash with environmental and human rights goals under the broader Green Deal framework.
Recently, the ASIC outlined its key focus areas for financial reporting and audit surveillance for the 2025–26 financial year.
The move reinforces ASIC’s ongoing efforts to raise the standard of financial disclosures and audit quality across the country’s regulated entities.
ASIC Commissioner Kate O’Rourke said the aim is to support integrity and transparency in corporate Australia. “These surveillance programs aim to enhance the integrity and quality of financial reporting and auditing in Australia. We expect all entities to provide reports and audits that are accurate, complete and informative,” she said.
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