The European Parliament rejected a compromise agreement that would have reduced the EU’s sustainability reporting and due diligence regulations from those proposed by the Commission, but not as much as right-wing parties had proposed.
The compromise was defeated by nine votes with 309 votes in favor, 318 against and 34 abstentions. The Omnibus initiative will now go back to negotiation in Parliament.
The Omnibus package was part of the Commission’s agenda to simplify regulations in order to increase European competitiveness and reduce compliance burdens on companies. Among the proposals was a plan to dramatically reduce the number of companies under the Corporate Sustainability Responsibility Directive. Legislators on the left strongly disagreed with what amounted to a gutting of the EU’s ambitious climate regulations while the right objected to what it considered a burden on businesses.
The left and center parties agreed on a “compromise” package proposed last week by the European People’s Party (EPP) that retained the CSRD’s 1,000 employee CSRD scope, but added a €450 million revenue threshold. It raised the Corporate Sustainability Due Diligence Directive, a law requiring companies to prevent adverse human rights and environmental impacts in their operations and across their value chains, to only cover companies with 5,000 employees and more than €1.5 billion in revenues.
Roberta Metsola, EP President, and a member of Malta’s Nationalist Party (PN) and the European People’s Party (EPP) said after the vote: “The vote on the Sustainability Omnibus showed that for a huge section of parliament this compromise simply did not go far enough and that it would not have made things things actually better, simpler or easier. And for some of the members any change was way too far. That’s the situation where we are now but I was clear that this is a parliament that remains firmly committed to our simplification agenda.”
