The Interplay between the CSDDD and the CSRD in light of the Proposal to Simplify Sustainability Rules

This paper analyses the interplay between the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), with a particular focus on the implications of the recent ‘Simplification Omnibus I Package’. Initially conceived as complementary instruments, the two directives were intended to establish a coherent regulatory framework for sustainable governance within the European Union. However, the amendments proposed through the Omnibus Package appear to shift the regulatory balance away from harmonisation and legal certainty, toward a narrower scope of application and reduced normative ambition. The analysis explores key areas of convergence and divergence, including definitional inconsistencies (notably between the concepts of “value chain” and “chain of activities”), climate change transition plans, and enforcement mechanisms. This assessment is conducted in light of the differing positions currently held by the European institutions, namely, the Commission’s proposal, the Council’s negotiation mandate, and the European Parliament’s draft report. The paper finds that, despite the Commission’s stated objective of ensuring greater alignment and simplification, the Omnibus Package undermines the overall consistency and effectiveness of the system. The conclusion highlights the concern that, under the pretext of simplification and in the name of competitiveness, the EU’s sustainability legislation may be deprived of its regulatory force, ultimately undermining its ability to meet the objectives of the European Green Deal.