The EU’s announcement that it will streamline its maze of environmental, social, and governance (ESG) regulations has been perceived by some as the bloc giving in to the anti-ESG movement.
However; closer examination reveals that this “simplification omnibus” is not a concession, but instead a strategic reorganising of the EU’s sustainability policies. Instead of compromising on social responsibility, the omnibus could strengthen ESG principles and undermine the US-led anti-ESG movement.
The rise of the anti-ESG movement
Since Donald Trump’s second inauguration in January 2025, companies and governments around the world have faced extreme pressure to dismantle their ESG policies.
Conservative lawmakers in the US have mounted legal challenges against pension funds prioritising ESG investment—and the federal government has threatened to rescind funding from universities that refuse to scrap diversity, equity, and inclusion (DEI) policies. Changes to ESG policies and principles are being observed in other places, including in the European Union with its upcoming policy omnibus.
The EU’s simplification omnibus
The EU omnibus is a collection of amendments to existing sustainability regulations, designed to simplify them. While first hinted at by Ursula von der Leyen in November 2024, the policy was formally introduced in February 2025. The affected regulations include the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), the EU Green Taxonomy, and the Carbon Border Adjustment Mechanism (CBAM). The policy bundle was announced in November 2024.
CSRD mandates that all companies publicly disclose their ESG impact. The omnibus will change this so that the number of companies in scope is reduced by 80% and the deadline for reporting on some metrics will be delayed. The CSDDD mandates that companies conduct due diligence on the ESG impact of their operations and supply chains. The omnibus will decrease the frequency of these required DD reports (from once a year to every five years) and will no longer require companies to investigate their indirect business partners.
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By GlobalDataThe EU Green Taxonomy is a framework to define and classify sustainable economic activities within the EU. The omnibus will make reporting voluntary in many cases and will allow companies to be considered sustainable with only partial alignment to the taxonomy. The CBAM is a policy designed to prevent carbon leakage from the EU’s emissions trading system (ETS) by reducing incentives to offshore high-carbon manufacturing. The omnibus will exempt importers of small volumes of CBAM-applicable goods, up to a threshold of 50 tons.
Claims of surrender to the Trump-led anti-ESG movement are unfounded
On the face of it, it does seem that the EU is making its sustainability requirements less stringent. Critics of this EU regulatory omnibus claim that the bloc is compromising on its sustainability goals—or even conceding to Trump’s demands on the topic. Within the EU parliament, the Greens party has called the policy package a “massive deregulation that undermines the green transition”, according to Net Zero Investor.
But it is important to consider just how complex and high-stakes the European regulatory environment is (or was). The administrative costs that companies could face because of too much ESG regulation could have decimated the market’s competitiveness.
The EU omnibus is essentially an effort to simplify regulations that are proving a headache for European businesses—particularly SMEs—without compromising on sustainability goals. The policy bundle could prove the opposite of a boost to the anti-ESG movement pioneered by Donald Trump.
Anti-ESG sentiment relies heavily on frustration with red tape and government overreach. By reducing the complexity of the EU regulatory environment, the omnibus will help to temper allegations of this sort. As a result, the policy could bolster support for social responsibility and environmental protection.
