Sustainability's Uncertain Future in the EU: An Expert Analysis

2025 is set to be an eventful year for sustainability in the European Union. After the release of the Draghi report and the results of the EU parliamentary elections in 2024, sustainability regulations enter the new year on the defensive against increasingly critical attacks from industry and elected representatives alike.

Richard Gardiner is well placed to provide guidance and insights into what to expect in the EU in 2025. He is the strategic public policy lead at the World Benchmarking Alliance, a Dutch-registered NGO that analyzes the sustainability performance of the 2,000 most impactful companies around the world to establish benchmarks and best practices for sustainability. His background includes directing the EU office and advocacy efforts at Global Witness, where he spearheaded campaigns and initiatives aimed at tackling corruption, human rights violations, and environmental harm perpetrated by corporations and governments around the world. His work has been critical in establishing impactful coalitions, creating strategic alliances, and achieving meaningful and lasting advocacy results.

Gardiner began the conversation with 3E by discussing the potential omnibus, which EU President Ursula von der Leyen announced on 8 November 2024. Von der Leyen asserted that overlapping requirements in the Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy Regulation, and the Corporate Sustainability Due Diligence Directive (CSDDD or CS3D) are creating bureaucratic obstacles that are potentially constraining EU competitiveness, and that an omnibus regulation will be critical for eliminating redundancies and creating efficiencies.

Gardiner emphasized that while discussions of creating efficiencies and reducing bureaucracy are nothing new for the EU, the idea of the omnibus seems to be gaining some traction.

“The term 'omnibus' comes around every five years,” said Gardiner. “But this one gained particular traction because five years ago, industry wasn't really present in the discussions where we got the Green Deal with the current president. So, the omnibus has gained traction because the industry is much more prepared.”

Despite being more prepared, industry seems less sure of what it wants out of an omnibus, with terms like “streamlining” and “efficiency” having very little detail as of yet. Gardiner attributes this at least in part to the EU trying to adopt a U.S.-style approach to regulatory change.

“I think the European Commission has adopted quite a U.S.-style approach of trying to get results in the first 100 days, which kind of makes sense when you have executive power, as you do in the U.S.,” said Gardiner. “But that's very hard to deliver in Europe, where you have 27 member states negotiating with 27 commissioners and 705 MEPs (members of parliament).”

As a result of this approach, the omnibus is currently big on ideas but short on detail.

“What we're trying to wrap our head around is what they mean by an omnibus and a roadmap to application of laws,” said Gardiner. “That could make sense where you bring out a certain amount of guidance around what a company does when it's got, maybe, three types of due diligence regimes and wants to know how to use its resources the best way and show compliance through different means. Or do they mean an omnibus that identifies all the different problems and proposes to slash X, Y, and Z and here is the legislative proposal to do it?”

Gardiner also said that the French commissioner's introduction of the Clean Industrial Deal on 26 February 2025 - the same day the EU will release more details about the potential omnibus - only adds to the confusion.

“Those two things are coming on the same day,” said Gardiner. “Will he produce an omnibus? Will he produce a clean industrial deal that includes an omnibus? They don't know. Essentially, nothing is off the table. They're canvassing businesses and member states to find out what they want, but not every member state has the same industry. For example, if they tackle the automotive industry, that does nothing for Ireland, which has no automotive industry.”

Gardiner emphasized that while cost might be a frequent platitude in discussions about the feasibility of sustainability reporting, the reality is that it has more to do with liability and not knowing what businesses might discover when they conduct due diligence on their supply chains.

“What the legislation did was a good thing,” he said. “It forced European companies to think about their supply chains, to ask how they get their stuff and how it gets there. They finally admitted they have complicated and undocumented supply chains. I think we need to own up to that to see how we can fix it.”

The Fight Over Corporate Sustainability

With sustainability regulations under attack, it certainly looks as though industry's goal for the omnibus would be to get most of it repealed. “It's all just terms to delay, confuse, and stop a general understanding,” said Gardiner. “The way you kill something is you show it's unworkable and unmanageable, that you can never do it, and that it will hurt citizens and the economy.”

According to Gardiner, industry's lack of preparedness and confusion is a significant contributor to the regulatory chaos. “It would be a lot clearer if the big trade associations of business said exactly what they want, but they don't know or they haven't figured out what they could live with. They say completely contradictory things about sustainability legislation. They say they need the flexibility for this to be practical in various sectors - which makes a lot of sense - but then they say we need legal certainty, that we need to know exactly what we have to do right down to the detail so lawyers can sign off on plans, strategies, whatever. But you can't have both. The first means you have to trust in the regulator, trust in the process, while the second is something you can control a lot more and sign off on in a report. I'm pretty much convinced that many businesses, not all of them, but enough of them just want this gone.”

Gardiner sees some of the criticism against CSDDD and CSRD as misplaced, when in reality, it's supply chains themselves that obscure transparency. “You could say the law's unworkable because the [supply chain] model is unworkable,” said Gardiner. “As soon as the reporting laws say to go down their supply chain information, they realize they buy everything from China, and how are they ever going to get information from there? They simply can't, so they say the law is unworkable.”

Despite what seems like a bleak outlook for sustainable supply chains, Gardiner emphasizes that EU regulations have, in fact, had an impact on creating positive change. “Companies are not willing to take responsibility for driving socioeconomic change,” he said. “They think they're just subject to the whims of the world. But what we had hoped the EU laws would achieve is actually stopping that individualism. Yes, one company cannot change the world, but if they all have the same problem - such as the garment industry has around the production of cotton - then together they're quite powerful. We've already seen voluntary initiatives in the cocoa industry that have worked. It's not an absolutely perfect scenario, but if you can open up the world's most horrendous supply chains and if everyone is engaging with it, it's a hopeful thing.”

It's All About Trade

With President Donald Trump back in the U.S. White House and a general shift to the right in many other countries, experts are wondering what sustainability regulations in the EU will look like, particularly after the introduction of the omnibus in February. According to Gardiner, President Trump's economic priorities are almost certain to set the tone.

“Making European supply chains sustainable has changed into a trade debate,” said Gardiner. “That is going to dominate the lens of everything and make it about winning and losing.” According to Gardiner, this approach of using trade to undermine sustainability has worked in the past. “What ultimately delayed the first deforestation law was a letter from [the U.S.] congress saying, 'we will stop doing business with you.' And then Lula in Brazil said, 'I will block the whole Mercosur trade deal if you don't delay this law.' So, with the emergence of Trump and the hard stance of the Brazilian president or people in other jurisdictions, they're using that as a leverage point to say we're raising the bar too high and that we won't be able to trade. So, it really seems to be everything is going to be seen through a trade lens.”

Gardiner says this will have a significant impact on EU sustainability regulations. “It will be about how to appeal to American companies so they can basically find a baseline they're happy with and keep the U.S. trading partners happy,” he said. “It just casts a big doubt over everything because everyone's going to say, 'Right, whatever the law is, how does this put us on the trade scale?' And there's no question it's going to be very short term.”

Editor's Note: 3E is expanding news coverage to provide customers with insights into topics that enable a safer, more sustainable world by protecting people, safeguarding products, and helping businesses grow. Expert Analysis articles, produced by 3E subject matter experts, researchers, and consultants as well as external thought leaders, examine the regulations, trends, and forces impacting the use, manufacture, transport, and export/import of chemicals.