Experts recommend that businesses invest in technology and automation to adapt to the evolving regulatory landscape, integrating ESG into core strategies and improving sustainability data management.

The EU Taxonomy will see reduced mandatory reporting requirements, allowing larger companies to opt for voluntary reporting, which aims to decrease complexity in compliance.

Key changes to the Corporate Sustainability Reporting Directive (CSRD) are expected to reduce the number of reporting companies by about 80%, primarily affecting firms with over 1,000 employees and significant revenue.

Non-EU companies will now be required to have a minimum EU turnover of €450 million to fall under CSRD requirements, with some reporting deadlines postponed to 2028.

Saskia van Gendt, Chief Sustainability Officer at Blue Yonder, argues that while some view the regulatory changes as a reduction in transparency, they may allow SMEs to focus on impactful sustainability initiatives.

In 2025, significant changes to European regulations on Environmental, Social, and Governance (ESG) issues are set to impact around 50,000 businesses, particularly aiming to simplify compliance for smaller companies.

The European Commission's Omnibus Simplification Package is designed to reduce regulatory complexity, responding to business leaders' calls for a lighter reporting burden, especially for small and medium enterprises (SMEs).

Changes to the Carbon Border Adjustment Mechanism (CBAM) will adjust thresholds, exempting many importers while retaining most emissions in scope and allowing for reduced costs based on carbon charges paid in third countries.

Procurement leaders are advised to invest in technology for better data management to ensure compliance with the new regulations and enhance corporate value in sustainability efforts.

While the Omnibus Package aims to alleviate the complexity of sustainability regulations, it may also introduce new challenges for businesses.

The Corporate Sustainability Due Diligence Directive (CSDDD) will narrow its focus to direct suppliers and contractors, with compliance timelines extended to July 2028 for large companies.

Despite the intended simplifications, over 200 organizations have criticized the changes, urging the EU to maintain robust sustainability standards and emphasizing the need for double materiality reporting.