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The Omnibus I political agreement announced yesterday broadly eases the sustainability compliance and due diligence burden for businesses under the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD), giving much-needed certainty to businesses. It is a significant achievement for the EU’s simplification agenda and ongoing efforts to reduce the regulatory burden. Specifically, the flexibility introduced in terms of the risk-based approach and how companies need to define adverse impacts will alleviate most of the excessive burden that existed under the original CSDDD. The revised transposition timeline of CSDDD to 2029 will also give all parties the necessary time to prepare for implementation.  

However, it appears that EU policymakers did not yet sufficiently tackle how these rules apply to the global activities of companies and groups – for example, by limiting the scope of the CSDDD to only those products and services with a logical link to the EU. This is a missed opportunity with far-reaching consequences that keeps legal uncertainty in place for global firms and their supply chains.  This oversight on extraterritorial impact will make the CSDDD more difficult for policymakers to implement and monitor and risks creating confusing overlap with other jurisdictions’ rules. 

The EU must use the next steps in the policy-making process – including implementing measures, guidance and future reviews – to fix outstanding challenges in both the CSDDD and the CSRD. In particular, clearer rules on when and how EU legislation impacts global business activities would give companies the predictability they need to invest and support sustainability investments. 

AmCham EU has joined 16 industry partners in urging support for the amended Taxonomy Delegated Act. With application set for 1 January 2026, any delay would create legal uncertainty and disrupt company preparations already underway. The revised rules offer simplified and more consistent reporting obligations, essential for business confidence and regulatory stability. Reopening the process now would increase costs and undermine Europe’s competitiveness. Learn why timely adoption of the Delegated Act is critical to ensure predictable implementation, maintain trust in the EU Taxonomy framework and support companies’ sustainability efforts in the joint industry statement.

The European Parliament’s adoption of its negotiating position on the Omnibus I package marks a major milestone towards a simpler, more consistent and workable sustainability reporting and due diligence framework for companies operating across the Single Market. The final text, however, fails to reflect the concerns of third-country stakeholders and international businesses over extraterritorial effects.

The framework’s implementation risks creating legal uncertainty for global businesses and conflicts of law in different jurisdictions, thereby undermining the diversification of supply chains and chilling investment in the EU. Limiting the scope of the initiatives to an EU Nexus – in other words, making them apply only to those global supply chains directly linked to the EU market – will be critical to achieving sustainability and competitiveness goals.  

The Omnibus I is part of a wider agenda dedicated to improving the competitiveness of the EU’s economy. The Draghi report clearly outlined the pressing urgency of addressing Europe’s competitiveness challenges as a precondition for the EU realising its wider strategic objectives. Europe must act urgently to strengthen its economy and this can only work with ambitious simplification efforts. This imperative should transcend party political lines.  

As the Omnibus I now enters into trilogue discussions, policymakers must secure a strong mandate to improve the EU’s business environment.