The European Commission’s effort to scale back corporate sustainability reporting and due diligence requirements has come under sharp scrutiny, with the EU Ombudsman concluding that the process used to draft the reforms fell short of the Commission’s own transparency and accountability standards. Ombudsman Teresa Anjinho said that the shortcuts taken during the preparation of the so-called Omnibus package amounted to maladministration, opening a new controversy at a moment when the EU is already divided over the future of its sustainability rulebook. The findings follow a formal inquiry that began in May after complaints were lodged alleging that the Commission bypassed several steps required under the EU’s Better Regulation Guidelines. These guidelines serve as a rulebook for how legislative proposals must be prepared, assessed and consulted on before they reach lawmakers or the public.

A Reform Process Under Pressure

The Commission unveiled its Omnibus I package in February 2025, framing it as a broad initiative to reduce regulatory burdens across the EU economy. A major part of the proposal included substantial cuts to sustainability reporting and due diligence obligations. The package proposed to narrow the scope of the Corporate Sustainability Reporting Directive, amend the Corporate Sustainability Due Diligence Directive, and introduce changes to the Taxonomy Regulation and the Carbon Border Adjustment Mechanism. The political process surrounding the package has since moved into EU Council and Parliament negotiations. Early signals indicate that the final reforms could scale back sustainability obligations even more dramatically than the Commission initially envisioned. Parliament has pushed to restrict the CSRD to companies with more than 1,750 employees, while both Parliament and Council have backed proposals that would exempt all but the very largest firms from the scope of the CSDDD. Against this backdrop, the Ombudsman’s findings raise questions about the legitimacy of the Commission’s fast-tracked approach and whether the reforms were pushed forward without adequate analysis or justification.

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Key Procedural Failures Identified

The Ombudsman’s investigation highlighted a series of failures in the Commission’s internal process. One of the most striking findings relates to the internal consultation period. As a rule, Commission departments have ten working days to review new legislative proposals. In exceptional circumstances this period can be shortened to forty eight hours. For the Omnibus package, however, the consultation period was compressed to less than twenty four hours and conducted across a weekend. According to Anjinho’s report, officials were given time from Friday night until Saturday night to assess and respond to a major legislative overhaul. The Ombudsman concluded that such a rushed timeline made it impossible for departments to conduct a meaningful review, undermining the purpose of the Better Regulation guidelines, which are intended to ensure that proposals are thoroughly vetted across policy areas. The inquiry also found a lack of internal documentation showing that the Commission carried out a climate consistency assessment. Under the European Climate Law, the Commission must assess whether proposed policies align with the EU’s legally binding goal to reach climate neutrality by 2050. The absence of clear evidence that this assessment took place raises concerns that the climate implications of weakening reporting and due diligence obligations were not properly evaluated.

Balancing Urgency and Accountability

In a public statement, Ombudsman Anjinho acknowledged that EU institutions must be able to work quickly, particularly during periods of geopolitical instability or economic stress. However, she stressed that the need for speed cannot override the principles of openness and accountability that underpin EU legislative processes. Her statement underlined that citizens have a right to understand not only what policies the Commission proposes but also how and why those policies were developed. Procedural shortcuts risk undermining trust in the integrity of EU lawmaking at a time when sustainability regulation is already contested and politically sensitive.

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Implications for the EU’s Sustainability Rulebook

The Ombudsman’s findings inject further uncertainty into an already contentious policy debate. Critics of the Omnibus reforms argue that weakening sustainability rules contradicts Europe’s climate and environmental targets and creates regulatory instability for businesses that have already invested heavily in preparing for CSRD and CSDDD compliance. Supporters of the reforms, including several member states and business groups, claim that the original sustainability legislation imposes unmanageable administrative burdens and threatens competitiveness. The procedural concerns raised by the Ombudsman may fuel calls to revisit or slow down the reform process, while others may use the findings to challenge the legitimacy of the proposed cuts. As negotiations between Parliament and Council continue, the Ombudsman’s report serves as a reminder that the process used to craft policy matters as much as the final outcome. With sustainability regulation poised to shape investment flows, corporate disclosure, and global market standards, EU institutions are under growing pressure to demonstrate that any changes are grounded in robust analysis and transparent decision-making. The Commission is expected to respond formally to the Ombudsman’s recommendations, but the political ramifications of the ruling are likely to echo through the broader debate on Europe’s climate governance and economic strategy.

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