You are here
Omnibus I: Parliament delivers critical simplification yet overlooks extraterritorial impact
The European Parliament’s adoption of its negotiating position on the Omnibus I package marks a major milestone towards a simpler, more consistent and workable sustainability reporting and due diligence framework for companies operating across the Single Market. The final text, however, fails to reflect the concerns of third-country stakeholders and international businesses over extraterritorial effects.
The framework’s implementation risks creating legal uncertainty for global businesses and conflicts of law in different jurisdictions, thereby undermining the diversification of supply chains and chilling investment in the EU. Limiting the scope of the initiatives to an EU Nexus – in other words, making them apply only to those global supply chains directly linked to the EU market – will be critical to achieving sustainability and competitiveness goals.
The Omnibus I is part of a wider agenda dedicated to improving the competitiveness of the EU’s economy. The Draghi report clearly outlined the pressing urgency of addressing Europe’s competitiveness challenges as a precondition for the EU realising its wider strategic objectives. Europe must act urgently to strengthen its economy and this can only work with ambitious simplification efforts. This imperative should transcend party political lines.
As the Omnibus I now enters into trilogue discussions, policymakers must secure a strong mandate to improve the EU’s business environment.