Between appeals to "common sense" (an argument frequently used by Donald Trump to close debates) and warnings from pro-CSRDs, the Omnibus bill, which aims to simplify a series of environmental and societal regulations that weigh on companies, already has its share of potential winners and losers.

The secret of a change of stance

This legislative package encompasses a number of regulations, including the CSRD¹, the European Taxonomy, the Duty of Vigilance Directive (CS3D²) and the Carbon Border Adjustment Mechanism (CBAM).

For once, the subject of regulation is stirring up passions. Between industry lobbies, NGOs, Member States and political groups in Parliament, the omnibus does not rhyme with terminus, and even less with consensus.

At a time when Europe's competitiveness is being undermined by the United States and China, Mario Draghi's report in September 2025 pointed the finger at the piling up of standards deemed too complex and costly for SMEs. Highlighting the Old Continent's economic stall vis-à-vis the United States and China, this report became a structuring factor for the continent following the election of Donald Trump, who promised a wave of deregulation.

The Omnibus Directive also includes changes designed to optimise the use of European investment programmes such as InvestEU. These changes will make it possible to mobilise an additional €50 billion in public and private investment. The aim is to support priority policies such as competitiveness, energy transition and environmental sustainability. By simplifying administrative requirements and increasing investment capacity, the European Union (EU) hopes to stimulate innovation without sacrificing sustainability.

Who benefits from doubt?

It seems clear that opponents of climate change, as well as companies slow to comply with the CSRD, are enjoying a reprieve and may even be reassured by the idea that the reporting obligation will be scrapped. According to the European Commissioner for the Economy and Simplification, "regulation is seen by more than 60% of EU businesses as an obstacle to investment, and 55% of SMEs cite regulatory and administrative burdens as their biggest challenge"³. Since 26 February, a wide-ranging review has been announced that could see almost 80% of the companies initially covered by the CSRD removed.

After being described as a "bureaucratic frenzy"⁴, or "hell for business"⁵, the Omnibus is seen as a breath of fresh air for some SMEs, whose management was reluctant to absorb yet more new acronyms such as ESRS⁶or IRO⁷, which even the community of responsible investors found difficult to grasp.

The costs associated with putting CSRD reporting on track and the possible fines associated with taking due diligence into account in the value chain were widely highlighted. Ursula von der Leyen promised proposals that would enable companies to save more than €37 billion a year over the next five years, in order to remain competitive

Potential losers from this project

By reducing its regulatory lead, Europe seems to be focusing more on adapting to climate change and less on combating it. This movement is enabling China to consolidate its role as the industrial cradle of the energy transition: electric cars, wind power, solar panels: production, installation and innovation are following at a frenetic pace, and there is no shortage of investment ideas.

Secondly, the most virtuous European companies, which had committed to an ambitious CSR approach and significant budgets to comply with the CSRD, are now faced with regulatory uncertainty. It is now up to them to capitalise on these new resources to initiate or consolidate innovative CSR approaches, and thus distinguish themselves from traditional practices in order to attract more capital.

From the point of view of NGOs, the CSRD represented a key lever for competitiveness and business resilience in the face of the climate and social crisis. Some⁸ fear that this omnibus project will result in a lowering of climate ambitions and a dilution of companies' obligations, particularly in terms of the attention paid to their supply chain.

As for investors, they were eagerly awaiting the CSRD to provide them with the data they needed for their own sustainability reporting, under the SFDR framework, as well as to feed into their investment decisions. The prospect of gradually gaining access to reliable, standardised non-financial data (initially for companies based in Europe) raised hopes that dependence on external data providers would be reduced. However, investors still have the ability to use shareholder engagement as a lever to capitalise on other, more qualitative data collection methods.

In conclusion, the debates on the omnibus are likely to continue to rage, as are those on the future of the European Green Deal in general. While the desire for simplification seems laudable, attention will be focused on the effectiveness of policies in the face of the climate emergency. If investors end up with less ESG data than expected, the collection of extra-financial information will have to find another way. At Mandarine Gestion, we believe that qualitative analyses of companies, close contact with management and shareholder engagement have their place in making up for this lack of information. The proactivity of asset managers in conducting high-quality extra-financial analyses will undoubtedly create value in the face of passive management in this regulatory morass.

Sources (in French only):

1 CSRD: Corporate Sustainability Reporting Directive, the name given to the European directive on the publication of sustainability information. It replaces the NFRD and applies to a larger number of companies than the latter.
2 CS3D: Corporate Sustainability Due Diligence Directive, a European Commission proposal for a directive aimed at creating a transparent framework requiring large companies to demonstrate due diligence in their own activities and those of their suppliers.
3 "Simplification administrative : le plan de l'UE est-il à la hauteur des besoins de ses entreprises", www.journaldeleconomie.fr, 14 February 2025.
4 "La directive CSRD, "délire bureaucratique" pour le directeur général de BNP Paribas", www.challenges.fr, 24/11/2024
5 "Directive verte européenne : la CSRD est "Un enfer" pour les entreprises, dénoncent le gouvernement et le patronat", www.boursorama.com, 22/01/2025.
6 ESRS: European Sustainability Reporting Standards. The ESRS is a set of standards and indicators defined at European level (via the European Commission) with the aim of framing the impact and reporting of companies on the subject of sustainable development.
7 Impacts, risks and opportunities, known as IROs, are at the heart of sustainability reporting for companies.
8 No to the Omnibus! More than 160 organisations oppose a review of the duty of care directive, www.asso-sherpa.org, on 14/01/2025.

Omnibus: the winners and losers of the simplification shock

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