CSDDD Article 22 and the Climate Transition Plan: What the Final Omnibus Actually Did

Of all the changes the Omnibus I package made to the CSDDD, the deletion of Article 22 is the one that generated the most heat. A group of legal scholars wrote an open letter. A Dutch S&D parliamentarian resigned as her group's lead negotiator. Civil society groups called it the directive's most significant rollback. And yet some companies and their advisers welcomed it as an overdue simplification.

This post explains what Article 22 originally required, exactly what the Omnibus removed and when, why critics say it matters, and - crucially - what still obliges large companies to think seriously about climate transition planning even after the deletion.

Already up to speed on scope and thresholds? This post focuses specifically on Article 22 and climate transition plans. For the full picture of who is now in scope of the CSDDD, see our companion piece Are you in scope of the CSDDD after Omnibus I?. For a broader overview of every change the Omnibus made, see Omnibus I is now law: what actually changed for the CSDDD.

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What Article 22 Originally Required

The original CSDDD - Directive (EU) 2024/1760, which entered into force in July 2024 - contained a standalone obligation in Article 22 that went beyond due diligence. In-scope companies were required not just to have a climate transition plan, but to adopt one and put it into effect: a documented strategy explaining how the company would align its business model and strategy with the goal of limiting global warming to 1.5°C under the Paris Agreement.

That "put into effect" language was deliberate. Legal scholars who later wrote to warn against weakening the provision were clear on this point: Article 22 was designed as an obligation of means - a best-efforts obligation - rather than an obligation of result, meaning companies had to demonstrate responsible, good-faith steps to implement their plan, not guarantee specific outcomes. Recital 73 of the original directive made this explicit.

Article 22 was also designed to create a level playing field, where all in-scope companies would follow the same rules when setting and implementing climate transition plans. The logic was straightforward: if every large company operating in the EU had to adopt and act on a Paris-aligned plan, no single competitor could gain an advantage by ignoring climate risk.

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What the Omnibus Removed - and When

The legislative journey was turbulent. On 9 December 2025, the European Parliament and Council reached a provisional political agreement on the Omnibus I text. The European Parliament formally adopted the text on 16 December 2025. The EU Council gave its approval on 24 February 2026, and Directive (EU) 2026/470 was published in the Official Journal on 26 February 2026, entering into force on 18 March 2026.

The outcome for Article 22 was unambiguous. Article 22 has been deleted entirely (Recital 26), removing the substantive obligation to align business models with climate neutrality goals. This went further than even the Commission's original Omnibus proposal, which had sought to weaken Article 22 by removing only the "put into effect" requirement while keeping a duty to adopt a plan. While the Commission and the Council of the European Union initially advocated simplified requirements in their original proposals, the final Directive provides for the complete deletion of the transition plan.

In plain English: the CSDDD no longer requires companies to adopt and implement such plans. Article 22 has been deleted entirely (Recital 26), removing the substantive obligation to align business models with climate neutrality goals. Therefore, under the CSDDD, the obligation no longer exists to have and implement a climate change transition plan.

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The Criticism: Level Playing Field and Litigation Risk

The deletion did not pass without serious pushback - and not only from NGOs.

A group of legal scholars wrote to express their concern regarding an amendment in the Omnibus Simplification Package proposed by the European Commission, which would significantly weaken Article 22 of the CSDDD on climate transition plans. Their concerns were fourfold: states' legal obligation to regulate corporate greenhouse gas emissions would not be met; the internal market would fragment and litigation risk would increase; disclosure without follow-through may increase companies' liability exposure; and without guiding regulations, corporate climate transitions will be more disorderly and costly.

On the level-playing-field argument specifically, the scholars' concern was that removing a binding, uniform standard creates exactly the fragmentation it was meant to prevent. The absence of a binding regulatory framework will correspond directly with increased liability risks for private actors. Without a common EU-wide standard, companies in jurisdictions with stricter national transposition or active climate litigation environments face asymmetric legal exposure compared to peers in more permissive Member States.

While many agree that simplification of the CSRD and CSDDD was needed, the transition plans are seen as a huge loss in company transparency. Not only were the obligations for transition plans removed from the final text of the Omnibus, but so too was a plan for the European Commission to clarify what a climate transition plan should be. That guidance gap matters: without a common EU definition of what a credible transition plan looks like, market practice will diverge, making comparability harder for investors and lenders.

That data gap has led to many central bankers, investors and asset managers alike lamenting the reduction in scope of the CSDDD and CSRD and continued lack of data. "We are moving to a world of increased fragmentation and reduced accountability for transition plans, because obviously, if you don't have access to the data, then this is problematic from a financial service provider side."

The other side of the argument is worth stating fairly. Supporters of the deletion - including the European Parliament's EPP group, which drove the position - argued that the original Article 22 imposed a disproportionate compliance burden, that the "put into effect" language created legal uncertainty about what implementation actually required, and that the CSRD's disclosure regime was a more proportionate tool for driving transparency. The CSDDD is refocused on only the largest companies, accompanied by the much-lobbied removal of the proposed obligation to adopt a climate transition plan, penalties for non-compliance being capped at 3% of worldwide turnover, and deferred application by one year to July 2029. Together, these changes are aligned with the EU's drive to simplify regulations and to increase competitiveness by reducing burden for businesses.

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What Still Binds Companies: The Obligation Has Not Disappeared

Here is the critical point that gets lost in the headline "Article 22 deleted": the obligation to plan for climate transition has not vanished from EU law. It has shifted form - from a substantive "must adopt and implement" duty under the CSDDD to a disclosure-based "must report on what you have" posture under the CSRD. And several other regulatory threads remain live.

CSRD / ESRS: The Disclosure Duty Survives

A notable change is the removal of the CSDDD's mandatory obligation to adopt and implement a climate transition plan. Importantly, the CSRD still requires disclosure of a transition plan (if one exists); however, this CSRD provision is a disclosure-based obligation rather than a duty to adopt and implement a plan which was previously in place under the CSDDD.

The Final Omnibus keeps the CSRD obligation for companies to report on climate transition plans under Articles 19a and 29a, in line with ESRS. This is a disclosure duty: reporting undertakings must show what climate change transition plans exist (if any) and how they fit into strategy. Critically, the CSRD requirements on reporting on transition plans remain unchanged.

Under ESRS E1 (Climate Change), in-scope undertakings must disclose on transition plans, climate risk and resilience, policies, actions, targets, energy, gross GHG emissions, removals and credits, internal carbon pricing, and the anticipated financial effects of climate. Notably, ESRS E1 is the only topical European Sustainability Reporting Standard that an in-scope undertaking cannot quietly omit on materiality grounds: a finding of non-materiality must be supported by a documented forward-looking analysis.

The practical implication: a company that has no transition plan will have to say so publicly in its CSRD sustainability statement. That is a very different regulatory posture from the original CSDDD - but it is not nothing.

Sector-Specific Rules

Climate planning remains relevant under other EU laws, including the Emissions Trading Directive, the Sustainable Finance Disclosure Regulation (SFDR), the Ecodesign and Energy Labelling Directive, and the ECGT Directive. Since 10 January, banks have been required under Article 6 of the Capital Requirements Directive to consider short-, medium- and long-term ESG risks. Green bonds also require transition plans, while low-carbon benchmarks often require alignment with the Paris Agreement.

Investor and Market Pressure

Regulatory deletion does not equal market indifference. CSRD continues to require disclosure on climate transition plans, and companies remain subject to national regulations and market scrutiny. Investors have publicly warned that weaker EU mandates could lead to data gaps and reduced comparability in this area.

For some analysts, the changes to the Omnibus did not so much create an absence of information as "change how transition credibility is accessed." "As prescriptive requirements under the CSDDD are weakened, it becomes less about whether companies have formally implemented transition plans, and more about whether their actions are consistent with them."

National Law

The harmonisation provisions in the amended CSDDD leave some room for Member States to go further in specific areas. Companies operating in jurisdictions with active climate litigation environments - the Netherlands, Germany, France - should watch national transposition carefully. Dutch law transposing the CSDDD has explicitly affirmed the link between the Shell ruling and Article 22, and the lack of clear regulatory requirements may increase rather than decrease litigation exposure.

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What Should Companies Do Now?

The deletion of Article 22 removes a specific legal obligation - but it does not remove the strategic case for transition planning. Here is a practical framework.

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The Bottom Line

The deletion of the CSDDD Article 22 climate transition plan duty is real and legally significant. The final text removes climate transition plans from the Directive altogether, eliminating a significant behavioural requirement that would have made it necessary for large corporations to reduce their climate impact. Critics are right that this weakens a level-playing-field mechanism and removes a common EU standard for what "implementing" a transition plan means.

But the obligation has not disappeared from EU law - it has migrated. The deletion reduces overlap but does not eliminate the need for climate change transition planning. The CSRD's disclosure duty under ESRS E1 remains, sector rules remain, investor expectations remain, and national litigation risk remains.

"Just because you delete the word implementation, it doesn't mean that now companies can have transition plans and not implement them," as one expert put it. The companies that treat the Article 22 deletion as permission to deprioritise climate strategy are likely to find that the market - and their CSRD sustainability statement - tells a different story.