On February 26 2025, the European Commission (EC) unveiled its “Omnibus” proposals, introducing key changes to the EU’s sustainability reporting framework, including the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy Regulation. This initiative seeks to enhance the competitiveness of European businesses, while still aligning with the EU's climate objectives. The Omnibus proposals are also aiming to reduce the administrative burden on businesses because of sustainability reporting.
Key Proposals in the Omnibus Package
CSRD: What’s Changing?
1. Reduction in Scope of Reporting EU companies - The Corporate Sustainability Reporting Directive (CSRD) will now apply only to large companies with:
- Over 1,000 employees, and
- Annual turnover exceeding €50 million or a balance sheet total above €25 million.
This proposed change will remove approximately 80% of companies from the CSRD's reporting obligations, focusing requirements on entities with the most significant environmental and social impacts.
2. Postponement of Reporting Deadlines - The Omnibus measures propose delaying the reporting requirements by two years – to 2027 for wave two companies, and 2028 for wave three companies. This proposed change will provide companies with more time to prepare for CSRD reporting.
3. Introduction of a Value Chain Cap - The Omnibus measures propose the introduction of a ‘value chain cap’. This would limit how much information CSRD reporters can request from non-reporting companies in their value chain with fewer than 1,000 employees.
4. Exemption for SMEs - Small Listed and Medium-sized Enterprises (SMEs) will no longer be mandated to report under CSRD, easing the administration burden on smaller businesses. In addition, the Commission has proposed that it will adopt, by way of a delegated act, a voluntary sustainability-reporting standard (VSME) to facilitate reporting of sustainability information by companies that are not in-scope for the CSRD.
5. Streamlining of European Sustainability Reporting Standards (ESRS) - The Omnibus measures proposes to streamline the European Sustainability Reporting Standards (ESRS), reducing the number of data points and prioritising quantitative data over narrative text. The proposals also hope to clearly distinguish between mandatory and voluntary datapoints. The Commission has asked EFRAG to commence the work of simplifying the ESRS and to provide their technical advice by 31 October 2025.
6. Assurance on CSRD Reporting - The requirement to have assurance on a sustainability report is a fundamental part of the CSRD, with limited assurance in the first instance and the potential to move to reasonable assurance following a review. The Omnibus package seeks to remove the requirement for reasonable assurance as a means to streamline the reporting process, while also maintaining some oversight. This proposal has been largely welcomed as it would reduce the cost of compliance for CSRD reporters and would also be less burdensome.
CSDDD: Due Diligence, Made Simpler
1. Postponement of Transposition and Reporting Deadlines - The Omnibus measures propose to extend the reporting requirements to July 2028 and advance the adoption of the guidelines by one year (to July 2026), providing businesses more time to prepare.
2. Simplified Due Diligence Limiting Due Diligence to Tier 1 Suppliers - The Omnibus measures state that Companies would only be required to conduct mandatory human rights and environmental due diligence on their direct (Tier 1) suppliers/business partners, not their entire value chain and also by reducing the frequency of periodic assessments and monitoring of their partners from annual to 5 years, with ad hoc assessments where necessary.
3. Exemptions or Reduced Burden for SMEs - The proposals will also introduce limits to the amount of information that may be requested as part of the value chain mapping by large companies.
4. Harmonisation - The proposals hope to further increase the harmonisation of due diligence requirements to ensure a level playing field across the EU.
EU Taxonomy: A More Flexible Framework
1. Mandatory Reporting - Mandatory reporting will apply only to the largest companies with over 1,000 employees and €450 million turnover.
2. Voluntary "Opt-In" for Other Companies - Companies no longer required to report can still choose to disclose their taxonomy alignment voluntarily. Companies within the scope of CSRD reporting, but who don’t have a net turnover figure of €450 million would be encouraged to voluntarily report.
3. Increased reporting flexibility - The current Taxonomy rules only allow reporting on activities that are fully aligned with the regulation’s strict environmental and technical criteria. The proposed changes introduce more flexibility by allowing Companies to report on partially aligned activities — for example, if an operation meets some but not all of the criteria.
Next Steps
The omnibus proposals were adopted by the European Parliament in the form of two draft directives. The first focuses on the timing/deferral of reporting requirements and the second deals with the other proposed amendments to the CSRD and CSDDD.
The first directive, if adopted, is required to be transposed into national law by 31 December 2025. Member States will then have a 12-month transposition period for the second directive.
There is an urgent requirement to give clarity to companies and therefore finalise the CSRD and CSDDD adjustments as a matter of priority. It is expected that discussions on the broader Omnibus Package could extend over several months.
Contact Us:
If you have any queries in relation to this and the impact on your business, please contact Charlene McCrossan or Gareth Fitzpatrick of RBK who will be pleased to help.
- Charlene McCrossan: Audit and Assurance Associate Partner, (090) 648 0600
- Gareth Fitzpatrick: Governance, Risk & Assurance Manager, (090) 648 0600
