A sweeping reform led by the European Commission is set to reshape the environmental, social, and governance (ESG) reporting landscape across the European Union. The newly proposed Omnibus package simplifies ESG reporting requirements, allowing businesses to focus less on administrative tasks and more on delivering tangible sustainability outcomes. While the directive will be interpreted and applied differently across EU Member States, Romania stands out as a prime example of how national-level adaptation can unlock strategic benefits for businesses. The reform is expected to reduce the number of Romanian companies required to report on ESG metrics by up to 95%, particularly impacting small and medium-sized enterprises (SMEs). From Compliance to Impact: A Strategic Shift Under the Omnibus proposal, only large enterprises with more than 1,000 employees will be obligated to submit ESG reports. This move will exempt an estimated 5,700 SMEs in Romania, shifting the compliance burden away from smaller players and enabling greater focus on climate-positive actions like energy efficiency and carbon reduction. “The Omnibus reform provides a strategic opportunity for businesses to reallocate resources toward reducing environmental impact rather than spending them on compliance activities,” said Răzvan Nica, CEO of CarbonTool, a Romanian firm specializing in ESG and carbon management technologies. While the European Commission has approved the reform, it must still pass through the EU’s ordinary legislative process, requiring approval from both the European Parliament and the Council of the European Union before becoming binding law. Guiding the Transition: Practical Steps for Businesses Despite fewer mandatory reporting obligations, ESG remains a vital consideration for companies aiming to access green financing, enhance brand value, and align with evolving investor expectations. CarbonTool recommends three key actions for Romanian businesses: 1. Develop a tailored ESG strategy – Align with broader global trends and prepare for future regulations by embedding ESG into long-term business models. 2. Adopt internationally recognized frameworks – Voluntarily following standards like GRI, TCFD, and CSRD ensures transparency and improves appeal to global stakeholders. 3. Set performance-driven KPIs – Track and report metrics that show measurable impact, such as reductions in carbon intensity, energy savings, and sustainability per product line. Unlocking Innovation and Market Opportunity The reform opens the door for companies to reinvest in innovation, directing funds and efforts toward operational improvements, carbon footprint reduction, and digital transformation. These strategic investments help Romanian firms remain competitive in a global market increasingly focused on ESG values. “The reallocation of resources enabled by the Omnibus reform allows companies to deliver true impact—environmentally and economically,” Nica added. Positioning for Long-Term Value With the reduced administrative burden, Romanian businesses are now better positioned to scale sustainability efforts and adopt forward-thinking ESG strategies. CarbonTool is actively supporting this transition, offering expertise in integrating sustainable practices, setting impact-focused KPIs, and navigating evolving reporting landscapes. As the EU moves forward with implementing the Omnibus directive, Romanian companies have a unique opportunity to lead by example—shifting from ESG as a reporting obligation to ESG as a value creation engine.