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The European Commission (EC) published its long-awaited Omnibus simplification package on 26 February. The package revises key EU sustainability legislation such as the Corporate Sustainability Reporting (CSRD) and Due Diligence (CSDDD) Directives. These proposed changes will now need to be negotiated by the EU co-legislators, the European Parliament (EP) and the Council, and the final form of the Omnibus changes may still differ from what has been proposed.
The Omnibus package introduces a few changes affecting SMEs into CSDDD and CSRD. For instance, in CSRD the scope of companies is proposed to be reduced to only large undertakings with 1000 employees or above, which the EC maintains should lead to fewer sustainability data requests from in-scope companies to SME business partners. Moreover, the proposal removes the listed SME standard (LSME) as listed SMEs would no longer be in scope. The proposal also establishes the voluntary SME standard (VSME) as the value chain cap.
As for CSDDD, value chain due diligence is proposed to be limited to immediate tier 1 business partners only. It also limits value chain requests from SMEs for value chain mapping purposes, although the company may request additional information from its SME business partner if the information is necessary for value chain mapping but cannot be obtained otherwise.
Additionally, the Omnibus proposals to reduce reporting and administrative requirements on companies are to be expected in the months and years to come. For example, an omnibus setting up an EU definition for so-called ‘small midcaps’ is currently scheduled for 16 April, whilst another omnibus on EU tax legislation is foreseen for the first half of 2026.
The Communication gives indications on the measures the EC wants to undertake in order to channel savings and investments into financing Europe’s key objectives such as the digital and green transitions, and defence. This so-called Savings and Investments Union (SIU) would thus constitute a private financing arm for Europe’s strategic priorities.
One of the key objectives of the SIU is to ensure adequate financing for Europe’s SMEs and start-ups. In this regard, the Communication notably states that “more may need to be done to boost secondary markets for private capital, including by supporting exits by investors in private companies. Additional innovative approaches are needed to improve capital accessibility for smaller companies while offering private investors greater opportunities to engage with high growth companies not yet ready for a public listing”. Other measures such as removing financing and investment barriers, and revising the EU’s securitisation framework, are expected to additionally boost SMEs’ financing, the EC’s Communication argues.
The Communication includes a timeline of expected concrete measures in the next months and years to come.
The EC has launched a new initiative, the EU Sanctions Helpdesk, that is set to provide vital support to European SMEs navigating the complex landscape of sanctions. It offers a comprehensive range of services designed to help SMEs comply with EU sanctions worldwide, reducing the risk of non-compliance and associated costs.
The Helpdesk provides personalised support to SMEs performing sanctions due diligence checks and manages a dedicated website featuring sanctions-related information, events, tips, lessons learned, and more. All UN and autonomous EU restrictive measures are covered by the Helpdesk, providing SMEs with a one-stop-shop for sanctions compliance.
The EP Plenary addressed a first exchange of views with the EC on the sustainability Omnibus package on 10 March (see above). Commissioner Albuquerque presented the Omnibus proposal to the EP. Her statement was followed by MEPs’ statements and questions. Overall, the views in the EP were split with S&D and the Greens considering the Omnibus package as deregulation, while the EPP overall welcoming the European Commission’s (EC) proposal. Far-right parties were dissatisfied with the Omnibus, asking for even more simplification to arguably boost economic competitiveness.
This dynamic at first glance grants EPP a strong “kingmaker’s role” as it can seek a majority either on the far-Right or the Left-Liberal wings. However, the varying reliability of certain far-Right Groups, as seen in past meetings and EP votes, and the willingness of all EPP MEPs to work with the fringes rather than seeking compromises in the political centre, mean that things remain volatile in the chamber and outcomes are difficult to predict at this stage.
The EU finance ministers had a busy tax agenda for their 11 March ECOFIN meeting, during which they notably adopted their Conclusions on the tax simplification agenda. These Conclusions effectively present to the EC Member States’ expectations in this area. The Conclusions underline that the tax decluttering exercise must preserve EU achievements in combating tax fraud, evasion and avoidance, and that it should at least start with reviewing the Directive on administrative cooperation (DAC) and the Anti-Tax Avoidance Directive (ATAD). However, other tax legislation including on indirect taxation should be looked at as well, the ministers insist. Especially in the area of indirect taxation and VAT, significant simplification opportunities for SMEs in particular could be identified.
As a concrete next step, the ministers’ Conclusions ask the EC to present a road map of the envisaged work on tax simplification agenda before the end of Q3 2025 (i.e. by October) and to consult on that report with relevant stakeholders.
The Platform on Sustainable Finance, an advisory body to the EC, published an independent report on streamlining sustainable finance for SMEs on 21 March.
The report suggests developing a voluntary, streamlined approach – the “SME sustainable finance standard” – to help SMEs and their lenders or financiers voluntarily demonstrate SMEs’ environmental sustainability performance. The standard allows SMEs to disclose to their financiers their key performance indicators and demonstrate their climate‑related efforts, making it easier for financial institutions to assess and support them, including through an online tool that is suited to SMEs’ needs and capabilities.
The standard initially focuses on climate‑related sustainability and is planned to be expanded to other environmental objectives, bridging the gap between SMEs and sustainable finance.
The EU’s Intellectual Property Office (EUIPO) has kick-started its ‘Train the Advisors’ educational programme aimed at SME business advisors. This free training will equip SME advisors with first-hand intellectual property (IP) knowledge, helping them identify key moments where IP protection is needed and guiding their SME clients in safeguarding their businesses.
The first training session will take place on 8 April at 10-12:00 CET.
