Sedex's position on Omnibus 1 and key changes to CSDDD and CSRD
Charlotte Kincaid
Senior ESG Policy Manager
23 Dec 2025
About 5 mins
Recent changes under the EU Omnibus agreement has brought greater clarity and confirmed the scope and timing of EU sustainability regulation. The drivers for corporate sustainability remain strong – as do the benefits for companies leading the way.
The most successful businesses will be those that use the delays and reduced reporting scope to stay focused on action, positive impact and continuous improvement, reinforcing long-term resilience.
Omnibus I: What Changed and What It Means
The conclusion of Omnibus I has resulted in significant rollbacks of core sustainability regulations – the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) –with requirements now concentrated on the largest companies.
After a year marked by uncertainty and stalled sustainability investments, businesses now have clearer parameters to go full speed on corporate sustainability efforts. Now is the time to plan, strategize and invest with certainty. While reporting burden and regulatory pressure may ease, particularly for those that have been descoped, social and environmental challenges continue to pose material risks and opportunities that demand sustained attention and action.
Regulation is the floor, not the ceiling
Regulation sets a baseline – not the final goal. Sustainability and human rights efforts pre-date the CSRD and CSDDD. This year we’ve seen companies continue their commitments to strengthen their resilience and improve supply chain continuity.
Already, 85% of the S&P 500 and 93% of the FTSE 100 report against the Carbon Disclosure Project, and 98% of the S&P 500 use Global Reporting Initiative (GRI) frameworks. This demonstrates a proactive, resilient approach in an evolving regulatory landscape.
Risk based due diligence remains fundamental
Businesses have long been aligning their due diligence efforts with established “soft law” frameworks underpinning the CSDDD, such as the UN Guiding Principles for Business and Human Rights and the OECD Due Diligence Steps. We welcome the continued emphasis on risk-based due diligence in the final outcome, ensuring processes remains practical, proportional and effective.
The CSDDD remains a landmark development in expectations for large businesses with complex global supply chains. At the same time, momentum is building globally. 2025 has seen increased focus on human rights due diligence regulation, with governments in South Korea and Thailand actively pursuing this agenda. The CSDDD is just the beginning.
Invest in human rights for competitiveness
The Omnibus process prompted a re-examination of sustainability’s role in competitiveness. UNDP research confirms that improving corporate human rights policies does not harm financial performance—in fact, it correlates with enhanced asset efficiency. The evidence is clear: human rights due diligence is a strategic investment in resilience and long-term value.
Investors, consumers and regulators demand accountability. Businesses that act transparently will be better positioned for current and future market instability. Bloomberg Intelligence predicts that global ESG assets will hit $40 trillion by 2030. Businesses cannot afford to wait for legal mandates
Build agility and adapt to emerging risks
As climate-related risks increasingly threaten physical operations throughout supply chains. Adaptability is crucial for resilience, regardless of legislative requirements. Research from the World Economic Forum estimates businesses failing to adapt to climate risks could be losing up to 7% of earnings annually by 2035. Climate impacts overspill into social risks: according to the ILO, there has been a 16.4% increase in heat related occupational injuries in Europe and Central Asia since 2000. Human rights and labour standards risks are worsening – forced labour has become more entrenched while workers’ rights in Europe are worsening and at their lowest levels since 2014.
Companies recognise that action on social and environmental concerns is a strategic necessity for competitive advantage, supply chain continuity and stakeholder engagement.
We remain committed to guiding our customers through regulatory shifts, offering workable, scalable solutions to ensure due diligence remains both effective and practical for businesses of all sizes.
The data imperative: Strengthening supply chain due diligence and depth
With risk-based due diligence across the value chain now embedded in EU policy, businesses face growing pressure to understand and manage risks in deeper levels of supply chains.
Visibility beyond tier 1 is consistently identified as a challenge by Sedex customers – but it’s a clear priority. The most severe environmental and human rights risks exist beyond tier 1, and consumers see businesses as responsible for addressing human rights risks such as forced labour in their supply chains. As public scrutiny grows, businesses that invest in deeper supply chain visibility will be better equipped to navigate risks, disruptions and shifting expectations.
High-quality, standardised data on environmental, ethical and social topics is fundamental for risk assessment, benchmarking and corporate due diligence. Without robust supply chain transparency and site-level insight, businesses jeopardise long-term viability.
Cross-industry collaboration: A catalyst for scale and progress
Collaboration drives supply chain transparency and effective due diligence. The adoption of CSDDD, CSRD, and similar global regulations will make transparency, accountability, and collaborative remediation the norm. By pooling resources and sharing learnings, industries can streamline processes and scale impact—benefiting businesses across every tier.
Our commitment to in-depth supply chain due diligence
We support risk-based due diligence and alignment with widely adopted international standards. We champion these frameworks with our customers and engage policymakers to ensure sustainability and supply chain policies are practical, informed by best practice, and impactful. We remain committed to guiding our customers through regulatory shifts efficiently and responsibly.
As a leading due diligence platform, we go beyond compliance to champion voluntary disclosure and help companies to continuously improve. We help businesses integrate sustainable sourcing data into supply chain strategies, increasing transparency and resilience. Our aim is to provide workable, scalable solutions to ensure due diligence remains both effective and practical for businesses of all sizes.
Regulatory compliance is just one potential starting point, not the end vision for sustainable business. Proactive engagement, data-driven decisions, and cross-industry collaboration will define the businesses of tomorrow.
Industry call
We invite industry peers, regulators, and partners to collaborate on shaping regulations that are practical, aligned with international standards, and informed by best practice. Together, we can ensure that due diligence frameworks drive meaningful impact while remaining achievable for businesses of all sizes.
Join us in advancing supply chain transparency, strengthening risk-based approaches, and building solutions that deliver real-world improvements for workers, communities, and the environment.
Reach out to Charlotte Kincaid, Senior ESG Policy Manager or your usual Sedex contact, to join the conversations.
