POTENTIAL LEGAL CHALLENGES UNDER EU LAW TO THE PROPOSED OMNIBUS DIRECTIVE AMENDING THE CRSD AND CSDDD

The document argues that the proposed Omnibus Directive is vulnerable to legal challenges under EU law due to substantive and procedural failures. Substantively, it claims the directive violates the principles of proportionality, legal certainty, and coherence, and breaches the Charter of Fundamental Rights and the EU Climate Law by weakening corporate sustainability and due diligence requirements. Procedurally, it highlights the Commission's failure to conduct required impact assessments, climate-consistency checks, and extensive consultations, which may render the act voidable under the Treaty on the Functioning of the European Union (TFEU).

• The proposed Omnibus Directive significantly reduces the scope of the CSRD, limiting reporting requirements to large undertakings with over 1,000 employees and either a turnover above 50 million euros or a balance sheet above 25 million euros, which would reduce the number of affected companies by approximately 80%.
• The proposal weakens the CSDDD by limiting mandatory in-depth adverse impact assessments to a company's own operations, subsidiaries, and direct business partners (Tier 1), excluding indirect partners unless 'plausible information' of impacts exists.
• The Omnibus Directive removes the requirement for companies to 'put into effect' climate transition plans, shifting the focus only to the inclusion of 'implementation actions', which the analysis argues makes these plans 'mere tick-box exercises'.
• The proposal extends the scope of the maximum harmonisation clause in the CSDDD, which prevents EU Member States from introducing more ambitious national standards regarding identification duties and complaints mechanisms.
• The analysis identifies a breach of the principle of proportionality because the Commission failed to conduct an impact assessment, claiming urgency and the existence of previous assessments for the original directives.
• The directive may violate the principle of legitimate expectations as businesses invested resources based on the CSDDD and CSRD, and the Commission had previously committed to reporting on the CSDDD's effectiveness only by 26 July 2030.
• The proposal is argued to be incoherent with other EU policies, such as the EU Taxonomy, by limiting the information in-scope companies can request from out-of-scope suppliers to the voluntary VSME standard, hindering informed investment decisions.
• The analysis claims the directive breaches Article 11 TFEU and Article 37 of the Charter of Fundamental Rights by undermining the EU's goal of a high level of environmental protection and its 2050 climate neutrality objective.
• The Commission may have infringed essential procedural requirements by failing to provide a 'clear and unequivocal' statement of reasons for departing from the original CSDDD and CSRD, especially since no ex-post evaluations were performed.
• The Commission is alleged to have unlawfully failed to act under Article 265 TFEU by not conducting or publishing a climate-consistency assessment as mandated by Article 6(4) of the EU Climate Law.

APA

ClientEarth (2025). POTENTIAL LEGAL CHALLENGES UNDER EU LAW TO THE PROPOSED OMNIBUS DIRECTIVE AMENDING THE CRSD AND CSDDD. https://www.clientearth.org/media/yh2dnt0m/20250623_legal_analysis_omnibus-challenges.pdf

Chicago

ClientEarth. POTENTIAL LEGAL CHALLENGES UNDER EU LAW TO THE PROPOSED OMNIBUS DIRECTIVE AMENDING THE CRSD AND CSDDD. 2025. https://www.clientearth.org/media/yh2dnt0m/20250623_legal_analysis_omnibus-challenges.pdf.

Wikipedia

{{cite report |author=ClientEarth |title=POTENTIAL LEGAL CHALLENGES UNDER EU LAW TO THE PROPOSED OMNIBUS DIRECTIVE AMENDING THE CRSD AND CSDDD |date=23 June 2025 |url=https://www.clientearth.org/media/yh2dnt0m/20250623_legal_analysis_omnibus-challenges.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{clientearth2025potential, author = {{ClientEarth}}, title = {{POTENTIAL LEGAL CHALLENGES UNDER EU LAW TO THE PROPOSED OMNIBUS DIRECTIVE AMENDING THE CRSD AND CSDDD}}, institution = {ClientEarth}, year = {2025}, month = jun, url = {https://www.clientearth.org/media/yh2dnt0m/20250623_legal_analysis_omnibus-challenges.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }