Investigation Into EU Sustainability Reporting Bill Will Excite Activists, Change Little

Forbes

26-05-2025

February 27, 2025. European Ombudsman, Teresa Anjinho, takes oath of office before the Court of ... More Justice
In April, a group of climate change organizations filed a complaint with the European Ombudsman asserting that the European Commission failed to follow the proper process in drafting legislation to reduce sustainability reporting requirements. To the excitement of sustainability activists, on May 21, the Ombudsman announced she was opening an official investigation. While the investigation will grab attention, the limited authority of the ombudsman will result in little to no change to the final results.
In November, the new leadership of the European Commission proposed the Omnibus Simplification Package to reduce the scope of the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive. The proposal by the Commission was negotiated behind closed doors and largely held secret until the final draft was approved.
The Commission's proposal was then sent to the Council and the Parliament. Each body will debate their respective positions, before the three enter into a trialogue to come to a final proposal. While the normal process of negotiating a new directive can takes years, it is expected that the final package will be adopted in the fall. The accelerated timeline has concerned some sustainability advocates who believe reforms deserve more study and public debate.
In an effort to bring to thwart the reforms, in April, a complaint was filed to the European Ombudsman by 'eight civil society organizations': ClientEarth, Notre Affaire A Tous, Clean Clothes Campaign, European Coalition for Corporate Justice, Global Witness, Transport & Environment, Antislavery International and Friends of the Earth Europe.
On May 21, Teresa Anjinho, the European Ombudsman, announced an official inquiry into the complaint. The case is titled 'The European Commission's failure to comply with its 'Better regulation guidelines' in preparing a legislative proposal on corporate sustainability reporting and due diligence.'
In the official announcement, Anjinho states:
"The complainants argue that, in this case, the Commission departed from key procedural requirements foreseen in the Better Regulation Guidelines and failed to carry out a public consultation and an impact assessment without a proper justification. In their view, the Commission performed a rushed inter-service consultation that was not in line with its rules of procedure. They also consider that the Commission did not carry out a climate consistency assessment as foreseen by the European Climate Law (Regulation 2021/1119)…
'This is the third complaint that my Office has received in recent months concerning the Commission's compliance with legal requirements, its Better Regulation Guidelines and further rules in preparing legislative proposals. It is clear that the issues raised in these three complaints raise a number of important issues for the Ombudsman. For these reasons, I have decided to open an inquiry into this complaint.'
While the Ombudsman has the authority to conduct the investigation and produce a final report, authority to enforce recommendations is limited. 'The Ombudsman may be able to solve your problem simply by informing the institution concerned. If more is needed, every effort is made to reach an amicable solution that will put matters right. Should this fail, the Ombudsman can make recommendations to the institution. If these are not accepted, the Ombudsman can draw up a special report to the European Parliament, which must then take appropriate action.'
However, once the report is sent to the Parliament, it becomes a political process. The report is sent to a committee that decides if further action is necessary. That committee can submit a motion for a resolution by the Parliament.
Depending on the findings of the Ombudsman, there may be other legal options. The most likely is an action before the Court of Justice of the European Union making a claim that the Omnibus Simplification Package is illegal.
Even if the Ombudsman finds the process was was flawed, and the Parliament or Court intervenes in the legislation, the result is simply a procedural fix. The broader policy debate over the CSRD and CSDDD remains, and the tide has shifted on green policies and sustainability. At best, a victory for climate activists with the Ombudsman only delays the inevitable.