Elisabeth von Reitzenstein shares how the EU Omnibus Package is changing the landscape and what this means for Cascale members in her latest blog.
It’s the moment sustainability advocates anticipated – the adoption of the European Commission’s Sustainability Omnibus package proposals.
While the Commission touts these changes as a way to simplify reporting and reduce regulatory burdens, the reality is far less encouraging. The revisions therein present a lost opportunity for ambitious change.
This package proposes amendments to key legislative instruments, including the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CS3D), the Carbon Border Adjustment Mechanism (CBAM), and the Taxonomy Regulation. In practice, these proposals exempt nearly 80 percent of companies from the scope of CSRD, delay reporting until 2028 — instead of the originally targeted phased implementation in 2026 and 2027 — and extend the reporting cycle for due diligence from annually to every five years, among other amendments.
Such changes send a concerning signal: effective sustainability reporting and due diligence may no longer be a priority for the EU.
More nuances were outlined in recent media reports from Just Style and Sourcing Journal. In these articles, I stressed that while compromise is inherent to the legislative process, the EU institutions must resist any further weakening of the rules and work to recapture the initial ambition of the legislation. As I noted, “The future of sustainable business practices in Europe depends on them maintaining ambitious, enforceable rules. It is vital that the EU holds firm and continues to push forward the progressive policies we need to address global environmental and social challenges.”
The nuanced impact of the diluted CS3D cannot be understated: not only does it undermine hard-won progress in improving labor practices, reducing environmental harm, and driving decarbonization, but it also creates an uneven playing field where companies that neglect sustainability may gain an unfair competitive advantage. This message is deeply disappointing, suggesting that robust sustainability reporting and due diligence may no longer be non-negotiable, potentially leading businesses to scale back or even abandon their sustainability efforts altogether.
EU compliance remains a top concern for Cascale members. As businesses that are ethically and materially responsible for their supply chains, our members understand that sustainability regulations are not just legal obligations—they are fundamental to protecting people and the planet. That’s why the proposed changes in the Omnibus package are so significant. By narrowing the scope of sustainability reporting and delaying key requirements, these amendments threaten to block progress on corporate accountability. Now, more than ever, it is critical for all stakeholders to stay informed, proactive, and prepared.
Higg Index users are better positioned to stay up to date amid changes. Our Higg Index teams— especially within Higg BRM, Higg FSLM, and most recently Higg FEM—have been working to align tools with relevant EU legislation, including CSRD and CS3D. With these frameworks now subject to amendments, our alignment efforts must anticipate new developments and adapt accordingly to ensure businesses continue to have the necessary data and insights to meet evolving compliance requirements.
Yet, within this moment of uncertainty, there is also an opportunity for renewed ambition. The weakening of EU legislation does not mean that companies should pull back on sustainability efforts—quite the opposite. The responsibility now falls even more on industry leaders to set the bar higher, to demonstrate that responsible business practices are not just about compliance, but about long-term resilience and competitiveness. Cascale members and our community have an opportunity to lead by example, proving that sustainability commitments drive business success, strengthen supply chain relationships, and meet growing consumer and investor expectations for transparency and accountability.
To support this, Cascale’s Policy and Public Affairs team remains committed to providing guidance, updates, and advocacy. Cascale members and policy enthusiasts alike can stay informed through our public affairs newsletter, webinars, workshops, and reports. The upcoming Cascale Forum in Ho Chi Minh City, Vietnam, on May 14-15 will serve as a showcase of how members are leaning into sustainability despite regulatory backsteps, both in the EU and U.S. In the Asia Pacific region, countries like Vietnam are still bracing for a greener future, representing the global leadership opportunity in sourcing regions to continue deepening sustainability importance.
As we navigate these shifting regulations, Cascale will continue to monitor legislative developments and engage with members, stakeholders, and policymakers to advocate for renewed ambition that was lost in the latest updates, while collaborating with our Higg Index team to determine the best approach for tool alignment. While regulations may weaken, our industry’s commitment to sustainability does not have to. This is a defining moment—one where businesses can demonstrate that responsible leadership is not dictated by policy rollbacks, but by a vision for a more sustainable and equitable global supply chain.
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