EU Omnibus Regulations - October Vote

On the 22nd of October 2025, MEPs voted to reject proposed changes to the EU’s sustainability regulations.

The proposed changes, put forward by the European Parliament’s Committee on Legal Affairs on the 14th of October, would have effectively diluted the EU’s flagship sustainability rules - the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).

With the proposal being defeated by 318 votes to 309 (with 34 abstentions), MEPs will now vote on the proposal again in November. Given the close nature of this vote, it seems likely that an outcome will be difficult to predict.

Interestingly, the result of the vote has been celebrated by MEPs on both sides of the political spectrum. Those on the right argued that the proposals did not go far enough, and so see this defeat as an opportunity to push for further easing of regulations.

MEPs on the left appear to have come away from the vote with a sense of relief, knowing that regulations which they deem to be necessary and worthwhile have been (at least for the time being) upheld.

Our take at Ethical Screening is that now is the time for responsible investors to apply pressure where possible, in order to try and secure the future of regulations which would work to improve the reporting upon which ESG assessments depend.

Investment managers, for example, have a duty to manage their clients’ money in a way that reflects their values. If clients demand investments that are not linked to issues such human rights abuses and deforestation, then managers can leverage the influence of combined client assets to push for the regulations to be held, and by extension make it easier to prevent said assets from being linked to these issues.