The European Ombudswoman has opened an investigation into the European Commission’s preparation of the Omnibus Proposal aimed at simplifying EU sustainability reporting rules. The European Commission broke its own rules by rushing the legislation through without public consultation, research or environmental scrutiny. Now, the European Ombudswoman is investigating whether the process was fundamentally flawed, posing the unprecedented question:

In these circumstances, could the Omnibus Proposal be declared invalid?

Yes, let's see why:

What are the Better Regulation Guidelines?

A group of NGOs specialised in protecting the environment, human rights, workers’ rights, and tackling other social issues (namely, Client Earth, Notre Affaire A Tous, Clean Clothes Campaign, European Coalition for Corporate Justice, Global Witness, Transport & Environment, Antislavery International and Friends of the Earth Europe) have raised a formal complaint against the Commission for failing to comply with its own Better Regulation Guidelines.

The Better Regulation Guidelines were created by the European Commission with the objective of  designing EU policies and laws that are transparent, evidence-based, and inclusive. They also help ensure that laws remain fit for purpose, can adapt to change, and have the broad public support.

A few years ago, the Commission was very keen on applying a methodology that helps ensure that EU legislative proposals are developed responsibly, and in line with both democratic values and sound policy-making principles.

Departing from these guidelines without proper justification doesn’t just risk weaker policy outcomes, it leaves the public in the dark, not only about the content of legislation, but about whose interests were prioritised and why.

What did the Commission presumably do wrong?

The Commission bypassed key procedural safeguards, notably:

• No public consultation was carried out for the proposal.
• No impact assessment was performed to evaluate potential economic, social, and environmental consequences.
• No climate consistency assessment, required under Article 6(4) of the European Climate Law.

1. The public was never consulted

The Commission allegedly launched a fast-tracked inter-service consultation within sufficient time for thorough review. The Commission also claims that stakeholders were publicly consulted through other means, such as the 2023 “call for evidence” (still not published by the Commission) and several CSRD stakeholder forums. Nevertheless, it remains unclear:

• Who was invited to these meetings and how participants were selected.
• Whether the input received actually influenced the legislative proposal.
• Why these efforts were deemed sufficient substitutes for a formal public consultation.

2. The measures are not based on any relevant study or analysis

Similarly, the decision to waive a new Impact Assessment was justified on the grounds of “critical urgency” for EU business competitiveness. Yet, there is little clarity on:

• Who determined this urgency, and based on what evidence.
• Whether the referenced “existing impact assessments” genuinely address the Omnibus measures.
• A more reasoned explaination as to why no climate impact assessment was performed.

What's even more confusing is that the existing impact assessment accompanying the CSRD and the preparatory studies conducted for the CSDDD were completely disregarded. These documents clearly account for the trade-offs and benefits of each new requirement, motivating the choices made in the drafting of both proposals, and why other alternatives considered would be detrimental to the objectives pursued and were therefore rejected. Some of these detrimental alternatives are none other than the solutions proposed in the Omnibus.

3. There is no proper reasoning or motivation explaining the urgency, need and adequacy of the measures proposed

The European Parliament requested an expert review of the Omnibus Proposal and found that, while the Commission has a point regarding the burden that sustainability reporting requirements carry, the process failures in the creation of this Proposal are unseen. The Report states that the Commission is in the right to change its approach and priorities, but it is essential that it then argues either why the previous analysis conducted was incorrect, or how exactly an altered geopolitical landscape calls for new needs unforeseen in such studies.

4. Evidence shows the proposed rules are detrimental to the objectives pursued and do not solve the real issue

On the real problem causing the burden

Well, the Report found that, taken together, the CSRD, CSDDD and EU Taxonomy do impose a great burden on companies, especially when they fall under the scope of all three of them. Nevertheless, such burden comes from the complexity in the requirements, given that reporting doesn't just mean disclosing, but also collecting and analysing the data to be disclosed, which often requires a great structural reform within a company's operations to establish the necessary data-gathering mechanisms.

Therefore, reporting requires a costly initial investment and internal adaptation for companies who didn't have such mechanisms in place. On the other hand, the strategic information and the governance advantages that provide such mechanisms were found beneficial in many ways to the reporting companies' themselves, which can use that knowledge to mitigate risks and improve their resilience with regard to sustainability-related incidents.

While being so stubborn on reducing the reporting burden, the Commission neglects all these proven benefits, as well as the effectiveness of the CSRD and the CSDDD for the objectives they were created. Moreover, most of the amendments proposed affect the scope and frequency of the requirements; they focus on harmonising both directives in an attempt to solve a presumed overlap. The Report found that there is actually no overlap between these instruments. In short, the root causes of the problems that lead to that burden are left unaddressed because the Commission is too keen on fixing an imaginary issue.

On missing the point of both regulations

The combined effect of narrowing due diligence obligations to direct suppliers, removing the requirement for companies to implement climate transition plans, and excluding approximately 80% of companies previously covered under the CSRD significantly undermines the original purpose of these instruments. These directives were enacted to enhance corporate accountability, protect human rights, and address environmental damage across global value chains, objectives that are rendered largely ineffective under the current Omnibus Proposal.

In the absence of an impact assessment that justifies the necessity and proportionality of such big changes, serious questions arise about the legality of the Commission’s approach. A more legally and technically sound route would involve establishing clear thresholds, grounding proportionality in measurable criteria, and offering methodological clarity rather than removing key obligations. These types of reforms could achieve simplification without triggering constitutional or legal concerns. If the Commission had conducted an impact assessment, it would have had to explain why such more balanced and arguably more appropriate alternatives were not pursued.

Until such justification is made public, it will be difficult to view the Commission’s actions as impartial or as aligned with the broader public interest over private lobbying pressures.

Why is process so important in EU policy-making?

These concerns also touch on a long-standing debate about the European Commission’s democratic legitimacy and representativeness. Unlike national governments or parliaments, the Commission is not directly elected, its members are nominated by Member States and approved by the European Parliament, giving it only indirect democratic legitimacy.

Yet, the Commission holds a monopoly on legislative initiative under Article 17(2) of the Treaty on European Union (TEU). The European Parliament, despite being directly elected by EU citizens, can only invite the Commission to propose legislation, but the Commission is not obliged to do so. This institutional asymmetry reinforces the expectation that, at the very least, the Commission should adhere to principles of transparency, procedural rigor, and participatory engagement, especially when proposing significant changes to EU law which contradict the position they have been defending for the past 4+ years.

In non-elected expert bodies like the European Commission, the absence of democratic accountability is often counterbalanced by enhanced transparency mechanisms: live-streamed meetings, stakeholder consultations, and open data platforms. These tools are meant to approximate democratic legitimacy by making institutional reasoning visible, responsive, and contestable.

When those mechanisms are bypassed, rushed, or left unexplained, as is the case of the Omnibus proposal, it creates the perception not only of poor governance, but of unearned authority. This weakens trust not just in one proposal, but in the very system meant to ensure that EU law is evidence-informed, participatory, and rooted in the values of democratic representation.

This is now the third complaint in recent months the Ombudswoman has received concerning the Commission’s adherence to procedural rules in law-making. That pattern suggests a troubling trend: a potential weakening of the EU’s commitment to evidence-based, transparent, and participatory policymaking. In bypassing core regulatory checks, the Commission risks undermining the legitimacy of its own legislative proposals and eroding trust among stakeholders, particularly those not consulted. The Commission is also setting a dangerous precedent for how future regulations might be drafted.

What are the legal grounds that could lead to annulment of the Proposal?

The European Ombudswoman, Teresa Anjinho, investigates complaints about maladministration in the activities of EU institutions. She has made clear that the Commission must justify any deviation from its own procedural standards. And she notes that these rules exist to ensure that EU institutions act transparently and accountably. To that end, the Ombudswoman is now requesting access to a range of internal documents, including:

• The rationale for skipping public consultation and the impact assessment.
• Records of decision-making related to climate consistency obligations.
• Evidence supporting the shortened inter-service consultation process.
• Any approvals or exceptions granted by the Commission’s Vice-President or Directors contrary to the Better Regulation Guidelines.

The Ombudswoman also plans to hold a closed-door meeting with Commission officials to discuss these concerns, after which further document inspections may follow. Depending on the Commission’s cooperation and the findings that emerge, this inquiry could lead to broader recommendations.

The Ombudswoman’s findings and recommendations are not legally binding. Institutions are not obliged to follow them, but they are expected to respond, and often do. Non-compliance can result in public scrutiny, media coverage, and pressure from Parliament, civil society, and stakeholders.

The case may trigger further public debate or inspire legal challenges; requests for judicial review before the Court of Justice of the EU. In essence, if the Commission cannot explain and justify its actions, this case could raise the question of whether the Omnibus Proposal in itself is valid. Nevertheless, any legal challenge is likely to take up to five years to resolve, which would keep the entire framework into a prolonged state of uncertainty, undermining implementation and enforcement in practice.

If a case against the Omnibus Proposal was brought before the Court of Justice of the EU, there is more than one legal argument in which the claim could be founded:

1. Infringement of the Principle of Proportionality (Article 5(4) TEU)

The Omnibus Proposal arguably goes beyond what is necessary to reduce the administrative burden, and undermines the core goals of the CSRD and CSDDD. Without an impact assessment, the Commission has failed to demonstrate that these choices are proportionate responses to the problems they claim to address.

2. Violation of Article 52(1) of the Charter of Fundamental Rights

By weakening mechanisms meant to prevent environmental harm and human rights violations, the Omnibus Proposal may compromise the effectiveness of the protections for such rights, particularly under:

• ‍Article 37 - Environmental Protection‍
• Article 31 and 32 - Workers’ rights, fair and just working conditions, and child labour

Of course, limitations to human rights protections are possible if duly justified. Nevertheless, to allow for such limitations, the restriction must, among other things, be necessary to achieve an objective of general interest or to protect the rights and freedoms of others, and (again) observe the principle of proportionality. This ground has already succeeded in similar cases, the most recognised one being Digital Rights Ireland and Seitlinger and Others (C-293/12).

3. Breach of the Principles of Legal Certainty, Legitimate Expectations and Coherence

These principles ensure that:

• Laws are clear, predictable, coherent and stable over time,
• Stakeholders can rely on previously established legal obligations.
  

By suddenly reversing key regulatory obligations without transparency or justification and deviating from its own rules of procedure, the Commission risks violating legitimate expectations of companies, investors, and civil society, particularly those who have already taken steps to comply with the CSRD and CSDDD frameworks. This also violates the duty to state reasons of Article 296 TFEU.

The General Court has already made clear that the lack of consultation and impact assessment could be grounds of infringement of essential procedural requirements.

Nevertheless, the procedural deficiencies found in the Omnibus Proposal are (or were) fortunately, not a frequent phenomenon, so this case would set a precedent in that regard. Even in the absence of an impact assessment, in previous cases, the Commission put forward the working documents and in-depth analysis accompanying the challenged proposals, which could rely on existing impact assessments studying closely related issues as long as their conclusions were indeed applicable to the proposed measures.

That is not the case of the Omnibus Proposal, which does not carry any supporting documents motivating its measures, and the existing impact assessments mentioned by the Commission have explicit arguments against the measures proposed.

4. Violation of Article 11 TFEU and Article 37 of the Charter

Lastly, Article 11 TFEU requires that environmental protection requirements be integrated into the definition and implementation of EU policies and activities. When read in conjunction with Article 37 of the Charter, which guarantees high environmental protection and quality, the failure to conduct a climate consistency assessment, as required under the European Climate Law, could be seen as a serious breach of this obligation.

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If you’re navigating these regulatory shifts and want to understand what they mean for your organisation, we’re here to help unpack legal uncertainties, explore compliance strategies, or simply exchange perspectives, we’re happy to guide you in this evolving landscape!