EU Parliament Rejects Simplified Sustainability and Due Diligence Mandate

The European Parliament last week rejected the negotiating mandate adopted by its Legal Affairs Committee on 13 October for the so-called “Omnibus I Package” which aimed to simplify sustainability reporting and due diligence obligations for companies operating in the European Commission’s jurisdiction. The vote ended 309 in favour, 318 against and with 34 abstentions, the results of a secret ballot.

Under the proposal, obligations under the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) would have been scaled back, for example by raising thresholds for automatic coverage of companies and reducing administrative burdens. The Commission had introduced the Omnibus I package on 26 February 2025 with the stated aim of simplifying regulatory burdens for business while maintaining the integrity of the sustainability agenda.

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The failure to secure a mandate at this stage means that Parliament will vote at plenary on amendments to the file on 13 November 2025 in Brussels. Only after that vote will trilogue negotiations with member-states and the Commission resume. For companies, particularly in sectors such as apparel, textiles, manufacturing and supply-chain intensive industries, the rejection generates added uncertainty about the timing, scope and ultimate demands of sustainability disclosure and due diligence rules. While firms already covered by earlier waves of CSRD remain subject to existing obligations, those expecting lighter burdens under the simplified mandate must now reassess.

Observers note that the vote reflects deeper political tensions within the European legislative process: some MEPs argued the proposed simplification amounted to deregulation that could weaken Europe’s global sustainability leadership, while others considered the burdens on smaller companies to be excessive and harmful to competitiveness. As the next plenary session approaches, businesses should monitor developments closely, continue preparing for full compliance rather than assuming delays or relief, and engage with stakeholders on readiness for evolving EU sustainability regulatory architecture.