This article was the Topic of the Week in the newsletter for week 16 in 2025.

European Commission President Ursula von der Leyen announced a so-called omnibus procedure in February, and shortly afterwards the Commission delivered: The package is intended to simplify and streamline various regulations requiring companies to provide sustainability information. 

This is a glimmer of hope for German businesses. Because in the so-called Omnibus I, it is about very practical simplifications: fewer companies will have to prepare sustainability reports, and those still affected will be given more time to do so. However, a bold removal of reporting obligations would be a real solution from the perspective of many directly and indirectly affected companies. Although many smaller companies themselves are not obliged to report according to the wording, they already receive extensive questionnaires from their business partners, banks, insurers, or other institutions today: on human rights or equality aspects, environmental assessments such as CO₂ emissions, or even their remuneration systems. Business partners usually need this data to fulfil their own reporting obligations.

European directives hinder businesses

A major problem for these indirectly affected companies is that these inquiries are very differently designed and therefore take a lot of time to process. This binds specialists who subsequently cannot perform their actual work. This hits small and medium-sized enterprises (SMEs), which are actually not obliged to report on sustainability, doubly hard, as they usually cannot employ specialists for these tasks. 

The main driver of this development is the European sustainability reporting directive (CSRD) with its uniform European reporting standards. However, there are also other regulations around the environment, external economy, and finance that partly overlap or contradict each other. 

More sustainability in practice rather than on paper

The German economy stands by its responsibility to strive for the United Nations' sustainability goals. This is precisely why companies should focus their capacities on transformation itself or on research and development, not primarily on reporting so-called ESG data (Environment, Social, Governance). A DIHK position paper lists specific proposals on how both directly and indirectly affected companies can be relieved while simultaneously providing sustainability data along the value chain more practically. 

What needs to be done now

From the perspective of the commercial economy, it is important that the EU significantly simplifies its regulations on sustainability reporting to reduce disproportionate and impractical regulations. The statutory ceiling for data to be queried along the value chain must also be anchored. 

Furthermore, a uniform, practical, and voluntary SME standard as well as an easily accessible digital platform could curb the effort caused by numerous questionnaires. Such a standard should also be recognised by European and national banking supervisory authorities. At the same time, it should be usable as proof of sustainability activities in public tenders and funding programmes.

Reducing bureaucracy through companies and the EU

Businesses themselves can also contribute to reducing bureaucracy by only querying truly necessary and already available data along their value chain. It is right that the European Commission is tackling the problem at its root with the omnibus procedure. This means significantly reducing reporting data and sensibly coordinating the different obligations, standards, and regulations at the EU level. Now it is up to the politicians to implement the proposals at the European and national levels as promptly as the postponement of application periods has already occurred. This way, businesses can be quickly relieved and focus on concrete sustainability measures.