18/06/2025
Dismantling sustainability regulation is self-defeating
The sustainability crisis is a complex phenomenon marked by both serious global challenges and encouraging progress. In recent years, we have seen plenty of both. Now, concern is mounting over the so-called Omnibus initiative, which threatens to undermine the quality of sustainability reporting. Especially troubling is its disregard for value chain analysis – even though some of the most significant sustainability impacts occur precisely within those chains.
EU sustainability regulation has sparked hope that markets can be boldly steered toward more responsible leadership – the kind urgently needed for our shared wellbeing. At the heart of this transformation is the CSRD (Corporate Sustainability Reporting Directive), which applies across all industries and addresses sustainability in all its dimensions. Other regulations are built around the CSRD and support its objectives, both within companies’ operations and across their broader ecosystems.
Comparable, high-quality, and sufficient sustainability data is essential for decision-makers to navigate the future responsibly and with foresight.
CSRD data is critical for market functioning
Comparable, high-quality, and sufficient sustainability data is essential for decision-makers to navigate the future responsibly and with foresight. In many sectors, sustainability risks are so significant that without a clear data foundation, it is impossible to make long-term investment decisions or enact effective legislation. When information is missing, markets become vulnerable to sudden shocks – and rapid reactions to those shocks can undermine societal stability. The stakes, in other words, are exceptionally high.
Unfortunately, the promise of sufficient sustainability data has proven weak in these uncertain times. In addition to vague CSRD reports, the Omnibus initiative further erodes the credibility of responsible reporting and genuine sustainability efforts. Sustainability data risks being obscured, and the ability to anticipate changes in the coming years will lack the necessary precision.
The Omnibus initiative causes confusion
The stated goal of the Omnibus initiative is to simplify reporting and reduce the administrative burden on companies. In practice, the consequences are likely to be mostly negative, as the implementation of the CSRD reporting obligation is generally delayed by two years, and the CSDDD directive* by one. At the same time, the value chain perspective is narrowed, sector-specific standards are removed, and the assurance level for CSRD reporting is kept “limited” instead of the previously planned “reasonable.” The CSDDD requirements are also significantly weakened.
Only strong legislation can create fair rules for distributing the costs of sustainability. Without it, those who avoid responsibility gain an unfair competitive advantage. After all, the value chain is the backbone of modern business: there is no production without suppliers, and no business without customers. Responsibility must therefore extend across the entire value chain – not just to a company’s own operations.
The importance of sector-specific standards
Abandoning sector-specific reporting guidelines contradicts the stated objectives of the Omnibus initiative. These very guidelines could improve the clarity, consistency, and accuracy of reporting. They would bring much-needed focus by ensuring that relevant disclosures are targeted to the industries where they matter most while eliminating irrelevant or unnecessary data requests. At the same time, companies facing significant sustainability challenges would be held to clearer and stricter requirements.
In contrast, the criticism of CSRD’s overlapping requirements and vague high-level guidance is entirely justified. Redundancy adds unnecessary burden, and the current framework leaves too much room for interpretation. Without precise, sector-specific instructions, sustainability reporting risks remaining superficial – while its intended impact stays out of reach.
Elomatic continues to develop sustainability reporting
At Elomatic, our customer work remains at the core of our sustainability efforts, even as regulations evolve, including the Omnibus initiative. We are constantly developing our ability to measure, manage, and improve sustainability in our projects, as this is where our most significant impacts take place. Alignment with the EU Taxonomy is an integral part of our strategic development, and sustainability reporting emerges naturally from this ongoing work. It also allows us to share the results of our efforts with a wider audience.
Real progress depends on relentless collaboration between people and the planet. That is where the most sustainable innovations emerge: not merely adapting to planetary boundaries but turning them into a strategic advantage. When the right processes are in place, the burden of reporting becomes minimal, which is precisely why regulatory motivation is welcome. This development must not be curtailed – our planet’s boundaries will not bend to accommodate regulation.
* The Corporate Sustainability Due Diligence Directive (CSDDD) aims to require large companies to identify, prevent, and mitigate adverse impacts on human rights and the environment – not only within their own operations, but across their entire value chain, including subcontractors and suppliers.
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