Omnibus I Requires Greater Simplification: The Commission’s Draft ESRS Revision Still Falls Short on Social Standards

Position Paper Omnibus I 

June 2026

Executive Summary

• The Omnibus I legislative package establishes a clear political mandate to simplify EU sustainability regulation and strengthen competitiveness. The ESRS delegated act must now translate this mandate into tangible and measurable simplification.
• But, the ongoing revision of the ESRS is not far-reaching enough. The draft continues to impose disproportionate complexity and falls short of delivering meaningful simplification promised under Omnibus I., in particular for social standards.
• The Commission must uphold its political commitment to reduce reporting obligations by at least 25%. This must become visible in the structure, scope and volume of the ESRS, including social reporting.
• The delegated act must fully comply with the limits of Art. 290 TFEU (“non‑essential elements principle”) and 29b(1)(6) of CSRD. This requires strict adherence to the CSRD mandate and avoidance of any expansion through new concepts, implicit obligations or excessive sub‑subtopic proliferation.
• Social standards, in particular ESRS S1, remain overly complex and insufficiently simplified. Social reporting obligations must remain firmly anchored in the CSRD’s mandate, which limits the scope of social and human‑rights reporting to the 24 factors explicitly listed in Article 29b(2)(b); expanding beyond these legally defined factors risks overstepping the directive and undermining proportionality.

• EFRAG claims a 61% cut in mandatory data points. In reality, we estimate only a 10–20% reduction in reporting effort when measured by report length and scope. Most changes come from merging data points, eliminating duplicates, and removing items that required minimal effort – not from real simplification.
• The current structure, including the new sub-subtopics in brackets and the themes reflected in the objective sections of social standards, expands the scope in practice and risks reintroducing excessive reporting obligations. The inclusion of topics such as “privacy” and “adequate housing” demonstrates this overreach and creates overlaps with existing EU and national legislation.
• Requirements on “adequate wages” and remuneration metrics are legally unclear and inconsistent. Definitions of “pay”, “wages” and “adequate wage” are not aligned between the glossary, application requirements and disclosure provisions. They are also not coherent with the Pay Transparency Directive. At the same time, mandatory unadjusted indicators risk being misleading and not decision-useful. Moreover, In addition, emerging KPI concepts risk introducing a de facto shift towards “living wage” reporting, requiring entirely new data collection processes and exceeding the CSRD mandate.
• Key concepts are duplicated or inconsistently structured. For example, maternity leave is addressed both under social protection and work-life balance, leading to overlap, ambiguity and unnecessary reporting burden.
• Certain requirements go beyond the CSRD mandate and are unworkable in practice. This applies in particular to the obligation to assess individual social protection coverage, which companies cannot reliably verify. In addition, related obligations may require the collection of sensitive personal data, raising legal concerns. Moreover, undertakings already comply with comprehensive national social policy frameworks. Reporting on the outcomes of these legally mandated systems is redundant and must be removed.
• Some reporting obligations create disproportionate burden without added value, such as overly granular disaggregation (e.g. the new “Top 10 countries” rule), overlapping requirements with existing EU legislation (e.g. pay gap reporting under the Pay Transparency Directive and publicly available works council data, or the obligation to report on legal compliance.
• Many provisions remain still incompatible with EU treaty law and the German constitution, e.g., “Persons with disabilities”. Asking employees this kind of personal information is usually prohibited by law and considered an illegitimate invasion of privacy.
• Requiring companies to report on “ongoing” judicial and nonjudicial proceedings – including OECD contact point complaints – treats allegations as proven. This undermines the presumption of innocence and could distort public perception. Global companies might have to report tens of thousands of cases, creating a misleading picture and heavy administrative costs. Across ESRS S2, S3 and S4, the same core concerns persist. In ESRS S4, consumer disputes or lawsuits could be considered “human rights incidents,” significantly broadening the scope beyond the intent of the CSRD.
• Any simplifications introduced at CSRD level must not be counteracted by new layers of complexity, granularity or duplication in the delegated act. At the same time, the revised ESRS must fully reflect the safeguards introduced in the amended CSRD, ensuring that companies are not required to disclose information that would compromise business secrets, commercially sensitive data or security‑related information.
• Several new concepts, the introduction of formerly voluntary but now mandatory metrics, and new methodological requirements add complexity, increase legal uncertainty, and make reporting harder to audit. Without targeted fixes, the delegated act will not deliver the intended simplification. Structural changes, including the reorganisation and renaming of data points and the relocation of requirements across standards, further increase implementation costs and internal coordination efforts without delivering substantive simplification.
• Mandatory quantification of anticipated financial effects of sustainability topics remains speculative, commercially sensitive and unverifiable. Such requirements exceed the CSRD mandate, cannot be audited reliably and risk producing distorted, non‑decision‑useful information.
• The interaction between the Double Materiality Assessment and the new Fair Presentation principle risks creating disproportionate expectations for granular, geography‑specific and site‑level disclosures. In this context, adding civil society, NGOs and trade unions as “proxies for stakeholders” creates unrealistic expectations and goes beyond the purpose of sustainability reporting. In practice, these elements invite auditors to require a level of detail far beyond what is feasible, decision‑useful or mandated by the CSRD.

BDA remains committed to constructively supporting the Commission’s upcoming review and will continue engaging with national and EU institutions throughout the finalisation process to deliver a substantial burden relief for companies.