European Commission Under Fire for Skipping Key Checks on Sustainability Reporting Reforms

Key Takeaways

• Regulatory Shortcuts: The European Commission bypassed key procedural steps—such as an impact assessment and public consultation—when drafting changes to the CSRD and CSDDD.
• Transparency Concerns: The Ombudsman found insufficient justification for the Commission’s claimed urgency and raised doubts about the inclusiveness of stakeholder engagement.
• Climate Law Breach: The Commission failed to conduct a climate consistency assessment, potentially violating the European Climate Law.
• Compressed Internal Review: An unusually fast 24-hour internal review raised further concerns about procedural integrity.

Deep Dive

The European Commission is facing scrutiny from the European Ombudsman over its failure to follow its own Better Regulation Guidelines when preparing legislative changes to corporate sustainability reporting and due diligence rules. A formal inquiry led by Ombudsman Teresa Anjinho has revealed that the Commission bypassed critical procedural steps (namely, a public consultation, an impact assessment, and a climate consistency review) without providing adequate justification.

The investigation concerns the Commission’s preparation of its legislative proposal COM(2025) 81 final, which aims to amend the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) as part of the broader “Omnibus I” simplification package.

Alleged Failures in Transparency and Process

The complaint, registered as Case 983/2025/MAS and submitted in April 2025, triggered an inquiry in May. According to the Ombudsman’s preliminary findings, the Commission relied on a loosely justified urgency argument to skip essential steps outlined in the Better Regulation Guidelines and the European Climate Law. These include:

• No Impact Assessment: The Commission replaced a required impact assessment with a staff working document. While the guidelines allow for derogation in urgent cases, Anjinho noted that the Commission did not demonstrate a sudden or unforeseen event justifying such urgency. She questioned why “stop-the-clock” measures already in place under a separate proposal (COM(2025) 80 final) were not sufficient to allow for a proper impact assessment.
• No Public Consultation: The Commission also avoided a formal public consultation, citing time constraints and reliance on previous stakeholder engagements. However, the Ombudsman questioned whether earlier forums and meetings, some of which were primarily attended by business interests, adequately covered the scope of the current legislative proposal. Many stakeholders, she noted, had no opportunity to weigh in.
• No Climate Consistency Review: The Commission failed to carry out a climate consistency assessment, as required under Article 6(4) of the European Climate Law. While the Commission claimed the changes would not undermine the European Green Deal, it did not provide any supporting analysis or documentation to substantiate that claim.
• Abbreviated Internal Review: The inter-service consultation (ISC) (the Commission’s internal review mechanism) was concluded within 24 hours, launched on a Friday night and ending Saturday. This timeline is even shorter than the already-accelerated 48-hour fast-track ISC procedure allowed under exceptional urgency. The Ombudsman’s office noted the absence of any documentation explaining why such a rapid timeline was justified.

Anjinho has requested a detailed written response from the Commission by 15 September 2025, warning that no deadline extensions will be granted due to the broader significance of the inquiry, especially as the Commission is planning additional Omnibus legislative packages.

“Citizens may question the Commission’s commitment to a transparent, inclusive and evidence-based law-making process,” the Ombudsman wrote, adding that proper procedures are essential to ensure legitimacy and democratic accountability.

The investigation highlights growing concerns over how the EU balances regulatory streamlining with its climate goals and rule-of-law commitments. It also raises questions about whether urgency can or should override procedural safeguards, particularly in areas like sustainability reporting and due diligence, where stakeholder engagement and environmental impact assessments are critical.

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