Interview with Professor Andreas Rasche

Professor and Associate Dean at Copenhagen Business School

Context: What is the EU’s Omnibus I?

The EU’s Omnibus I directive is the first major sustainability “simplification” package intended to recalibrate the regulatory burden created by the Union’s corporate sustainability framework, with particular focus on the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive. Proposed by the European Commission in early 2025, Omnibus I responds to growing concerns from policymakers and industry that the combined scope, granularity, and timing of these regimes risk undermining competitiveness without proportionate gains in transparency or risk mitigation. Rather than dismantling the system, the directive preserves its core architecture, double materiality reporting, value-chain transparency, and mandatory due-diligence processes, while narrowing scope, easing timelines, and reducing spillover obligations on smaller companies.

In practice, it concentrates the most demanding reporting and due-diligence requirements on the largest firms with the greatest environmental and human-rights risk exposure, while curbing excessive data requests cascading through supply chains. Politically, Omnibus I signals a shift from legislative expansion to regulatory consolidation, aligning sustainability objectives with the EU’s broader competitiveness agenda. Adopted in late 2025, it marks a transition from rapid rulemaking to pragmatic implementation, setting the tone for how CSRD and CSDDD will be operationalized in the coming decade: less about volume and formalism, and more about decision-useful disclosures and enforceable corporate responsibility.

1. The Omnibus narrows the scope of the CSRD and postpone reporting timelines for many companies. From your perspective, what does this mean for corporate transparency and the comparability of sustainability data? And if regulatory requirements are eased, who will ultimately set the “real” expectations for sustainability disclosure — regulators, investors, or value-chain partners?

Of course, it reduces corporate transparency. Overall, the EU exempted around 42,000 companies from mandatory reporting. Some of these firms will continue voluntarily, but overall transparency takes a hit. We will also see reduced comparability of data, as the exempted companies are basically free to choose a standard if they continue with voluntary reporting. This can be the EU’s VSME, but it can also be the GRI or ISSB. So, fragmentation increases. However, we should not overfocus on regulation. Regulation is just one part of the puzzle. Many companies face expectations to report data to business partners; banks also increasingly ask for emissions information whenever they issue loans. So, the pressure points still exist – the Omnibus has not changed that.

2. The Omnibus is framed as a way to reduce regulatory burden and strengthen European competitiveness. How well do these changes align with the EU’s long-term climate commitments and Green Deal objectives? Do you see a genuine trade-off here, or is the bigger risk that frequent regulatory adjustments create uncertainty for companies trying to plan long-term transformation?

The Green Deal had a certain impact logic. This logic was as follows: regulations like CSRD provide transparency and comparability of information at a larger scale, investors can use this data to better allocate capital towards transition companies, and this helps with financing the Green Deal. This impact logic is not destroyed, but it is severely challenged as the EU exempted 90% of companies from the CSRD. So, the Green Deal objectives are still there, but the underlying mechanisms for financing the green transition are challenged. The biggest risk is the loss of regulatory predictability. Companies hate uncertainty and they need to trust institutions. In an environment, where regulations change every two years, uncertainty increases and trust is lacking. I actually hear when talking to business leaders that for them the biggest problem is the endless back-and-forth of the regulations due to new political majorities.

3.With proposed flexibilities in the EU Taxonomy, such as the concept of “partial alignment,” how might the Omnibus affect the credibility of sustainable finance in Europe? Could this help companies and investors better reflect transition pathways — or does it risk blurring the line between genuinely sustainable activities and incremental improvements?

I think the partial alignment under the Taxonomy makes sense. The old version was too much black-and-white thinking, and companies struggled with that. And there are also some safeguards related to this partial alignment, so it is not that companies can simply claim partial alignment. In the end, the green transition is a bumpy road and we need to accept that some economic activities only align over time with the Taxonomy criteria. So, I think the partial alignment opens an important door.

4. The Omnibus also amends the Corporate Sustainability Due Diligence Directive, delaying its implementation and focusing due‑diligence requirements on direct supply‑chain partners. What could be the consequences for supply‑chain sustainability and accountability? Might narrowing the scope of due diligence weaken efforts to address environmental and human rights risks in global value chains?

Indeed, the CSDDD was delayed – again – this time to 2029. Personally, I think these delays send the wrong message. It is a bit like saying: “Sustainability is something to think about tomorrow” and this leads procrastination on the side of companies which does not match with the urgency of the problems that we are facing.

The revised CSDDD still has a risk-based approach, so due diligence is not just limited to direct business partners. But there are a number of exceptions which will undercuts the quality of due diligence work, most notably that companies only have to evaluate the effectiveness of their systems every five years. Actually, international standards like the UN Guiding Principles on Business and Human Rights see due diligence as a continuous process which also requires continuous monitoring and steering.

5. Looking beyond the current Omnibus proposals, what are the likely next steps in the EU’s sustainability regulatory agenda? For example, should we anticipate further Omnibus‑style simplification packages (perhaps addressing EU investment funds) or new legislative initiatives in areas like climate resilience or biodiversity? How should businesses and policymakers prepare for this evolving regulatory landscape?

So far, the EU has issued ten Omnibus directives, while the CSRD and CSDDD were affected by the first Omnibus package. The other packages also have effects on sustainability, most notably the Environmental Omnibus (Omnibus VIII). But the EU is also still passing regulations that support sustainability measures, such as the upcoming Circular Economy Act or the Industry Accelerator Act. What businesses need to be aware of is that the EU reframes the sustainability discussion in terms of looking for measures that support geopolitical autonomy (e.g., decrease dependence on fossil fuels) and competitiveness (e.g. in terms of using the Single Market in the EU much more). So, sustainability has become more a means to end, and not an end it itself.

6. What should a CEO or board do in the next 90 days, and what should they lock in over the next 12 months, to stay ready for the final shape of the rules and market expectations? Or What should companies lock in now so they do not rebuild twice later?

I think this depends a lot on the situation of the company, and how it is affected by the Omnibus and other regulations. My general advice would be to not overreact and misinterpret these developments. There was a lot of emotional discussion around the Omnibus, and the changes are indeed significant. However, the changes do not signal that companies can simply walk away from reporting and due diligence. Legal obligations can change quickly but stakeholder expectations do not, because the physical realties around climate change and biodiversity loss remain the same. So, businesses should evaluate this carefully and mostly look at what these expectations of business partners and banks as well as investors are. This way you remain fit for the future.

7. If the Omnibus resets the scope and timelines, what will “good practice” look like by 2027–2030 for a large EU firm, and for a global firm with EU exposure?

Good practice always means that you look beyond compliance, this is true in the EU and beyond the EU. Just reacting to legal changes is – and never was – a good strategy. So, good practice in 2030 will be the same as today: remain prepared and look into the purpose of the regulations. I think this lack of reflection on purpose is a key problem. Many businesses view due diligence or reporting just as a burden. They have the feeling that these regulations do nothing for them.

But when you start to reflect on what the actual purpose of the CSDDD is then you realize that it is actually a risk management system that helps the company to steer litigation, reputation and supply chain risks. The same applies to the CSRD: this is not an exercise in just reporting some data. The double materiality assessment is a framework for strategic management to better understand risks, opportunities and impact. So, good practice is not to only ask what you need to do for compliance, but what compliance can do for you…

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