Omnibus - European Parliament Has Adopted Its Negotiating Position With Further Scaling Back Of CSRD And CSDDD

After previously failing to come to an agreement, the European Parliament yesterday adopted its negotiating position on the Omnibus package. This time, the position was adopted with a resounding majority — 382 votes in favor, 249 against, and with 13 abstentions. However, this majority was only secured by the centrist EPP group obtaining support from more right-wing groups in the European Parliament. Accordingly, the politics have played out in such a way that Parliament's position on some points goes even further than the Council in reducing the scope and substantive requirements of CSRD and CSDDD. The next stage is the trilogues, which are to commence on November 18, where the Council and Parliament will hammer out the final text. The expectation is that everything can be agreed before the end of the year.

We await publication of the full adopted text, which may yet include further interesting points of detail. In the meantime, the European Parliament has announced that its adopted position includes the following key points:

CSDDD

• CSDDD Scope: 5000 employees and €1.5bn turnover (same as Council)
• Due diligence: businesses would be required to adopt a "risk-based approach", and only request information from smaller business partners as a last resort (more limited than Council)
• Transition plans: deleted completely from CSDDD, but retained for CSRD.
• Liability:
  • No EU-wide liability framework (same as Council).
  • Any breaches of CSDDD would be dealt with at the local member state level.
  • Victims would be entitled to compensation for losses.

CSRD

• CSRD Scope:
  • 1750 employees (Council: 1000).
  • €450m turnover (same as Council).
  • New exemptions for financial holdings and listed subsidiaries (not in Council text).

In a press conference held shortly after the result of the vote was announced, Jörgen Warborn (EPP, SE), rapporteur on simplified sustainability reporting and due diligence requirements, justified the approach adopted by the Parliament by making repeated references for the need for Europe to remain competitive with other economies, and to ensure that European companies were not overburdened by regulation and bureaucracy. The full press conference is available here.

All eyes will now turn to the trilogues. While the timeline remains challenging, some sustainability practitioners may yet get the Christmas present they want most: a Porsche EV finalized Omnibus package.

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