Reflections from Brussels: EU Omnibus is More Reset Than Reversal

Rory Sullivan, Cora Buentjen and Sebastien Akbik

In May 2025, we travelled to Brussels to attend the Future of Sustainable Data Alliance (FoSDA)  (Chronos provides secretariat support for FoSDA) conference on the future of the EU sustainable finance framework and for a series of meetings with investors, policymakers and researchers. Much of the focus was on the immediate consequences of the European Commission’s ‘Omnibus I’ proposals to simplify the EU sustainability framework.

A shifting landscape

Many of those we met expressed concern that the Omnibus I proposals related to the Corporate Sustainability Reporting Directive (CSRD) would significantly reduce the availability and reliability of sustainability-related information. This is because it proposes reducing the number of companies required to report social and environmental performance, and reducing the amount of information to be reported by these companies.

 While many acknowledged the value in removing some data points, concerns were expressed about:

• The likely increased reliance on third party data estimates rather than data reported by companies.

• Larger companies’ capacity to report given that these companies often rely on data from their suppliers (many of which are SMEs which fell within the original scope of affected entities).

• Investors’ ability to make informed decisions being compromised.

• These changes signalling a broader retreat by the EU from its leadership position on sustainable finance.

 Chronos view: The sustainable finance community should see Omnibus as more of a reset than a U-turn.

 While we fully acknowledge these concerns, we view these changes as a pause and a reset rather than signalling a complete about-turn in the EU’s commitment to sustainability. It is clear that the EU remains committed to action on sustainability. For example, the EU’s Clean Industrial Deal announced in February 2025 focuses on supporting energy intensive industries (e.g. steel, metals, and chemicals) in their transition, boosting the cleantech sector, and expanding circular business models. It also focuses on finance, with the aim of mobilising over €100 billion to support EU clean manufacturing and production.

These are promising signs given the importance of policy incentives and public financing in enabling investors to allocate capital towards emerging clean technologies. This Deal can ultimately help to fill Europe’s €50 billion cleantech investment gap.

Notwithstanding the significant changes in the Omnibus I proposals, the EU will continue to remain a leader in sustainability and sustainable finance.  It remains one of the few jurisdictions with mandatory reporting having first introduced binding requirements under the Non-Financial Reporting Directive (NFRD). The EU has also so far reaffirmed its adherence to the principle of double materiality – a key pillar of the EU’s approach to sustainability under which companies should report not only on how sustainability issues affect their financial performance (financial materiality) but also on how their activities impact sustainability issues (impact materiality). The CSRD also retains the requirement for the limited assurance of reported sustainability-related data.

The sustainable finance community remains strongly engaged and supportive of the EU’s efforts. Investors have been clear that proposed substantive changes on the scope and implementation of disclosure and due diligence rules risk creating data gaps and costs for investors and companies. They have also been clear that this information is important to enable investors to meet their obligations such as the Sustainable Finance Disclosure Regulation (SFDR), and to efficiently reorient capital towards the objectives of the European Clean Industrial Deal, to foster long-term competitiveness, and to ensure the resilience of the financial system.

In conclusion, while the immediate responses from the sustainable finance community to the Omnibus have been critical, we remain optimistic. Over the past decade, there has been a period of rapid policy development and expansion, and of learning at scale. Our sense is that the more recent changes can be seen as a pause, an opportunity to reset and focus on those interventions that really matter and can be most effective. A recurring message from those we met in Brussels was that disclosure regulations are, of course, important in and of themselves. However, they are primarily of importance when focusing on how capital deployment can support competitiveness and enable the transition to a low carbon economy.

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·       For more about our work with FoSDA or for insights on sustainability-related regulation please contact: Cora.Buentjen@chronossustainability.com