Article

Omnibus: The journey is more important than the destination

Sustainability is crucial for business resilience and risk management, addressing climate-related challenges and maximizing opportunities amid ongoing societal changes.

On 26 February the European Commission issued an “Omnibus” package of measures to simplify EU regulations that mandate the timing and content of sustainability reporting, sustainability due diligence, and sustainability taxonomy.

This bill is currently at the drafting stage, meaning it is now going through the EU legislative process before it gets ratified and enforced. The timing and exact content will depend in part on the subsequent adaptation in EU countries. The fact that the Omnibus package seeks to amend regulations that are about to apply, particularly the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), can create uncertain times for companies as they navigate the evolving regulatory landscape.

A key step was achieved on 3 April 2025, when the European Parliament ratified the provision of the bill that postpones the enforcement of the CSRD and the CSDDD. In line with an earlier announcement, the Council of Member States is expected to ratify it too, for a swift completion of the legislative process for this part of the Omnibus bill.

During this period of uncertainty, sustainability can be a key driver to ensuring the resilience of business models and maximising the opportunities stemming from structural changes. According to the Global Risks Report 2025, seven of the top 10 risks are sustainability-related risks, such as climate-related extreme weather events, nature, and societal risks. An effective management of these risks will become imperative for companies and pressure will increase from stakeholders to adopt resilient strategies.

There are at least three reasons why companies should consider not stopping or delaying their sustainability journeys:

1. Focus on the journey rather than the destination

There is potential for competitive advantage for organisations that embrace the new sustainability regime as more than a sprint to their first sustainability report.

Some companies are being challenged by the complexity and detail of CSRD/European Sustainability Reporting Standards (ESRS) requirements. However, grasping new and complex requirements, setting up new governance, new roles, new processes, new tools, and looking for required data may eventually create new organisational ways of working, collective thinking, and behaving. This can allow you to prioritise, address, and exploit financially material risks and opportunities and manage potential regulatory, market, technology, people, or reputational issues.

Companies that understand the transformational nature of this journey, should start early and capitalise on additional benefits in the form of reduced uncertainty and improved organisational resilience.

2. Transparency feeds into competitive advantage

Regulating sustainability through mandatory reporting standards is just one way of promoting corporate transformation. As many organisations already know from years of interaction with key stakeholders, expectations from investors, employees, customers, or regulators (to name a few) have been on the rise even in the absence of binding reporting obligations. This may continue, potentially impacting business decisions, even if at a different pace depending on geography or sector.

Markets also have powerful self-regulating mechanisms. Delivering on a minimum level of transparency means that organisations understand the evolving trust dynamics and signal corporate discipline, and an openness to external scrutiny and benchmarking in an active pursuit of competitive advantage in the medium- to long-term.

Additionally, other jurisdictions have, or are about to adopt, ESRS-like mandatory sustainability standards. Such requirements will mark entry conditions into foreign markets. Hence, reversing your sustainability posture may turn into a competitive disadvantage in the future.

3. Access to capital and availability of risk transfer solutions

European capital markets continue to be relatively small, with the EU finance landscape strongly dominated by banking. On one side, listed equity stands at 68% of GDP (against 170% in the US), on the other in Europe banks have provided corporates 80% of capital, with bank assets standing at 300% of the euro area GDP (against 85% in the US).

As the main providers of lending in the EU, banks (and also insurers) are operating in a complex, heightened regulatory environment, with several climate and sustainability requirements . Compliance requirements for banks and insurers may create a “regulatory transmission” effect that cascades from the financial sector to the rest of the economy.

Irrespective of the mandatory or voluntary status of sustainability reporting for organisations, banks and insurers should consider to:

Assess sustainability performance of asset allocation and underwriting strategies and adequately price financial products.
Evaluate climate-related risks matching corporate transition plans against applicable sectoral benchmarks and look into corporates’ assets and business exposures for acute and chronic risks.
Assess social and governance risks at the portfolio level, considering the adherence of corporate counterparties to social and governance international standards.

At Marsh, we empower businesses to maintain resilience by analysing the evolving risk landscape, preparing for potential challenges, and providing insurance solutions for emerging risks. We offer a comprehensive climate and sustainability perspective on risk management, enabling you to gain a competitive edge and drive commercial success. Together, we will develop a proactive strategy that not only supports your financial stability but also contributes to a sustainable future.

The article is for information purposes only. Marsh makes no representation or warranty as to its accuracy. Marsh shall have no obligation to update the article and shall have no liability to any party arising out of this document or any matter contained herein. Any statements concerning actuarial, tax, accounting, labour, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, tax, accounting, labour, or legal advice, for which clients should consult their own professional advisers. Any analysis and information are subject to inherent uncertainty, and the article could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change. Although Marsh may provide advice and recommendations, all decisions regarding the measures should be adopted are the ultimate responsibility of the client.