• The EU Ombudsman found the Commission committed “maladministration” by rushing its Omnibus sustainability reforms without following its own Better Regulation rules.
• The inquiry revealed a sub-24-hour internal consultation, unclear climate-consistency checks, and no public consultation prior to proposing regulatory cuts.
• The investigation comes as Parliament and Council negotiate sweeping reductions to CSRD and CSDDD scope, shaping the future of EU corporate sustainability governance.

The EU’s Ombudswoman, Teresa Anjinho, accused the European Commission on Thursday of pushing through major changes to the bloc’s sustainability reporting and due-diligence framework without meeting the transparency, evidence-gathering, and internal scrutiny obligations set out in EU law.

Her office concluded that the Commission’s process for advancing the Omnibus I package — a proposal that would significantly scale back elements of the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and adjustments to the Taxonomy Regulation and Carbon Border Adjustment Mechanism — was marred by procedural failures.

“Taken together the shortcomings amounted to maladministration,” Anjinho said. “Certain principles of good lawmaking cannot be compromised even for the sake of urgency.”

EU’s Ombudswoman Teresa Anjinho

The watchdog’s findings follow two parallel inquiries launched after climate and human-rights groups alleged that the Commission weakened sustainability rules following private meetings with industry representatives and without consulting the public.

Compressed Timelines and Missing Climate Checks

The Ombudsman’s investigation revealed a consultation process within the Commission that lasted less than 24 hours — and took place over a weekend. While internal consultation windows are typically ten days, or in exceptional circumstances as short as 48 hours, the Omnibus consultation ran between Friday night and Saturday night.

The inquiry also found no clear internal record demonstrating that the Commission performed a climate consistency assessment. Such an assessment is mandatory under the European Climate Law to ensure all new EU policies align with the 2050 climate-neutrality goal.

Anjinho noted that urgency may be justified in specific circumstances, but not at the expense of accountability. “The Commission must be able to respond urgently to different situations, particularly in the current geopolitical context. However, it needs to ensure that accountability and transparency continue to be part of its legislative processes and that its actions are clearly explained to citizens.”

Commission Defends Its Approach, Campaigners Demand Withdrawal

The European Commission said it would review the Ombudsman’s recommendations, but maintained that its proposals were grounded in evidence and shaped through consultation processes. It also denied that its regulatory simplification efforts were influenced improperly.

Climate and human-rights organisations behind the complaint argue the opposite. They said the Commission proposed weakening EU sustainability rules after closed-door meetings with industry groups, and without assessing the consequences for climate goals or human rights due diligence. Their joint statement emphasised a core demand: “If this cannot be secured, the Commission should withdraw its proposal.”

The groups said any political agreement reached in the coming months must be rooted in publicly available evidence and align with Europe’s climate commitments.

High-Stakes Negotiations Now Shaping EU ESG Architecture

The Omnibus I package is now in trilogue negotiations between the European Parliament and Council, with both institutions moving beyond the Commission’s initial proposals and considering even deeper cuts.

Parliament is seeking to narrow CSRD coverage to companies with more than 1,750 employees — significantly above the Commission’s proposed threshold of 1,000. Both Parliament and Council are also exploring ways to remove all but the largest companies from the scope of the CSDDD. Those moves could dramatically reduce the number of firms required to conduct environmental and human-rights due diligence across their global value chains.

For corporate leaders, investors, and sustainability officers, the stakes are immediate. The final shape of the Omnibus reforms will determine disclosure obligations, assurance costs, supply-chain governance requirements, and alignment with emerging global standards. A sweeping reduction in scope risks further fragmentation between EU expectations, global ISSB-aligned disclosure practices, and national climate-neutrality strategies.

What Executives Should Watch

The Ombudsman’s findings do not halt the Omnibus negotiations, but they add political friction at a moment when Europe is rewriting the contours of corporate sustainability regulation. Lawmakers now face two linked challenges: addressing concerns of regulatory burden while preserving the credibility of the EU’s climate governance architecture.

The outcome will influence investor expectations, cross-border reporting frameworks, and the EU’s ability to maintain its position as a global reference point for sustainability regulation.

The closing months of negotiation will determine whether the bloc preserves a coherent ESG policy trajectory — or whether the Omnibus process becomes a precedent for expedited deregulation without the evidence-based scrutiny that originally defined the EU’s climate governance model.

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