Executive Summary: From Regulation to Execution
Europe’s sustainability and climate policy framework is evolving from growth to execution. With the Omnibus I Simplification Package and updates to the CSRD, CSDDD, and SFDR, the EU aims to streamline compliance while reinforcing resilience, adaptation, and competitiveness. This marks a shift from disclosure to decision-making—where sustainability due diligence becomes climate risk intelligence. Companies that integrate climate analytics, scenario modeling, and adaptation finance into strategy will not only meet EU requirements but also strengthen resilience, investor confidence, and long-term value creation.
A New Phase in Europe’s Sustainability Governance
Europe’s sustainability and climate policy landscape is entering a critical new phase. After a decade of regulatory expansion through landmark initiatives such as the EU Green Deal, the Corporate Sustainability Reporting Directive (CSRD), and the Corporate Sustainability Due Diligence Directive (CSDDD), the European Union is shifting from broad legislative growth to targeted implementation and financial alignment. Ramboll’s paper, “Shaping the Future of EU Sustainability Due Diligence – Beyond the Omnibus,” led by Thomas Trier Hansen, examines how this transformation is reshaping the governance of corporate accountability, climate risk management, and financial resilience — and what it means for institutions adapting to a more volatile world.
From Ambition to Execution: Building a Coherent Framework
Over the past ten years, the EU has built one of the most comprehensive sustainability and risk disclosure frameworks in the world. Through the Non-Financial Reporting Directive, the Sustainable Finance Disclosure Regulation, and the EU Taxonomy, policymakers have established a system designed to align capital flows and business decisions with long-term environmental and social stability. The intent is clear: to ensure that financial performance reflects climate realities. Yet, as these frameworks matured and compliance demands multiplied, the challenge shifted from ambition to execution.
Balancing Climate Action and Economic Competitiveness
The Draghi Report and the European Commission’s Competitiveness Compass reframed sustainability as a question of economic security. Policymakers now recognize that achieving climate neutrality must go hand in hand with protecting Europe’s industrial base and financial competitiveness. This evolving balance—between climate action and market resilience—has given rise to the Omnibus process, a legislative recalibration aimed at simplifying and synchronizing the EU’s sustainability rules without diluting their long-term goals.
The Omnibus I Simplification Package: Streamlining for Impact
The Omnibus I Simplification Package, expected to take effect in 2025, marks a significant turning point. It represents a strategic effort to reduce administrative burden while maintaining the EU’s commitment to resilience and adaptation. The package includes the “Stop-the-Clock” Directive, which delays the rollout of new CSRD and CSDDD requirements, and “Quick-Fix” delegated acts that temporarily relax Scope 3 emissions and social disclosures for smaller companies. It also introduces a voluntary sustainability reporting framework for small and medium-sized enterprises (the VSME Standard), enabling lenders, insurers, and investors better to assess exposure to physical climate risks across supply chains. Meanwhile, the forthcoming revision of the European Sustainability Reporting Standards (ESRS) will streamline data requirements, improve materiality assessments, and make climate and resilience disclosures more practical and decision-useful.
Toward Integrated Climate Risk Governance
Taken together, these reforms reflect a new phase of climate risk governance—one that links sustainability due diligence to adaptation, risk modeling, and financial performance. Beyond Omnibus I, additional legislative packages will address agriculture, defense, energy, and critical raw materials, signaling a broader shift toward integrating resilience and adaptation into every sector of the EU economy.
Refining Corporate Accountability and Due Diligence
The revisions to the CSRD and CSDDD reflect this same logic. The CSRD will now apply to large enterprises with more than 1,000 employees and turnover above €450 million, focusing on how business models “contribute to” rather than merely comply with EU sustainability goals. The CSDDD will cover substantial enterprises with more than 5,000 employees and €1.5 billion in global turnover, emphasizing direct partner due diligence while aligning with global supply chain risk frameworks. Collectively, these measures reinforce the principle that climate-related financial disclosure and physical risk management are inseparable.
A Converging Regulatory Ecosystem
Even as the Omnibus simplifies rules, the EU’s broader regulatory ecosystem continues to evolve. The EU Taxonomy, now being streamlined, remains central to classifying sustainable and climate-resilient activities. The revised Sustainable Finance Disclosure Regulation (SFDR) will help investors differentiate genuine adaptation strategies from “greenwashing.” The EU Deforestation Regulation, the Batteries Regulation, and the Net-Zero Industry Act all tie resource security and physical risk mitigation directly to financial disclosure and capital allocation. Meanwhile, the EU Banking Package (CRR III / CRD VI) embeds climate risk and environmental shocks into bank supervision and credit evaluation frameworks. These parallel reforms illustrate that sustainability due diligence is no longer an abstract concept — it is the foundation of financial system resilience.
Global Alignment and Convergence
Europe’s approach is already influencing global policy. From Germany’s Supply Chain Act and France’s Duty of Vigilance to Japan’s HRDD Guidelines and Canada’s anti-forced labor laws, a global convergence is underway around the management of environmental, social, and financial risks. For multinational firms, this convergence demands integrated data systems and consistent methodologies for measuring exposure to physical climate impacts and progress in adaptation across markets.
Resilience 2.0: A Strategic Vision for Sustainability and Security
At a strategic level, the European Commission’s Resilience 2.0 framework positions sustainability due diligence as a cornerstone of long-term economic and societal security. It connects responsible business conduct with Europe’s broader objectives of energy independence, social stability, and environmental resilience. In this context, due diligence becomes an operational tool for anticipating physical climate shocks, quantifying financial exposure, and directing investment toward adaptation and resilience measures that safeguard both assets and communities.
From Compliance to Competitive Advantage
For companies, the implications are profound. Adequate due diligence is no longer limited to compliance — it is a forward-looking form of climate risk intelligence. By embedding climate resilience into enterprise strategy, organizations can enhance operational efficiency, access lower-cost capital, and strengthen investor confidence. Aligning with international standards such as the UN Guiding Principles and OECD Guidelines provides a common foundation for transparent reporting and adaptive management under uncertainty. The organizations that integrate financial and physical risk analytics into their due diligence processes will not only comply with emerging EU frameworks but also demonstrate leadership in future-proofing their portfolios.
Beyond Omnibus: Toward Smarter, Data-Driven Governance
The future of EU sustainability due diligence lies beyond the Omnibus. Simplification is not a retreat from ambition but a step toward smarter, data-driven governance. As the European Union seeks to balance competitiveness with climate resilience, the companies that act early—by investing in climate risk modeling, scenario analysis, and adaptation finance—will define the next generation of responsible and resilient enterprise.
(Source: Ramboll. (2025). Shaping the future of EU sustainability due diligence – Beyond the omnibus (Thomas Trier Hansen, Author). Ramboll Group.)
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