Omnibus Proposal Released, Confirming Significant Changes

On February 26, 2024, the European Commission released the much-anticipated Omnibus package, confirming significant changes to the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), and EU Taxonomy. These updates aim to simplify compliance, reduce reporting burdens, and enhance the EU’s competitiveness.

What are the most important changes?

The much-anticipated proposal confirms key changes to the scope, timelines, and other compliance aspects of the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy. The most important change is aligning the CSRD and CSDDD scopes, removing 80% of companies from CSRD reporting requirements. Companies also get more time to comply.

The Carbon Border Adjustment Mechanism (CBAM), the EU’s carbon border tax, is also part of this simplification effort.

What specific changes are proposed?

The Omnibus package has the most significant impact on the CSRD. The proposed changes will focus sustainability reporting requirements only on larger companies, because these “are more likely to have the biggest impacts on people and the environment”.

CSRD updates

• Raising the threshold from 250+ to 1,000+ employees

• Postponing reporting requirements by 2 years (until 2028)

• Introducing a financial materiality threshold for Taxonomy reporting and reducing reporting templates by 70%

• Eliminating the requirement to move from limited to reasonable assurance

• Revising the first set of ESRS and reducing mandatory data points

• Removing sector-specific standards

• Keeping the VSME standard voluntary for out-of-scope companies

CSDDD Updates

• Limiting due diligence requirements to direct business partners only

• Extending partner monitoring cycles from annual to 5 years

• Reducing information requests in the value chain

• Eliminating EU civil liability conditions

• Clarifying and narrowing stakeholder engagement requirements

• Postponing sustainability due diligence requirements to July 26, 2028

EU Taxonomy Updates

• Aligning taxonomy disclosures with CSRD delays.

• Reducing EU Taxonomy data points by two-thirds.

• Increasing the threshold to all companies within scope of CSRD (over 1,000 employees) but with additional requirement of over €450 million in turnover.

• Reporting is optional for companies with < €450 million in turnover with no aligned sustainable activities. If companies with < €450 million do have aligned sustainable activities, reporting on revenue and CapEx is mandatory while OpEx is optional.

CBAM Updates

• Exempting 90% of companies from direct regulation

• Simplifying the rules for companies in scope.

• Introducing a voluntary EU certification system.

• New legislation expected in 2026.

What is the goal of the Omnibus package?

The Omnibus package aims to simplify regulations, boost competitiveness, and unlock investment. The goal is to reduce annual administrative costs by €6.3B and unlock an additional €50B in public & private investment.

As mentioned in my previous blog post, these simplification efforts are part of the EU Competitive Compass. President of the European Commission, Ursula von der Leye, introduced this initiative in November 2024 as a strategic roadmap to strengthen the EU's competitiveness by 2029.

What are the next steps?

Important reminder: this Omnibus package is just a proposal. The proposal will now be submitted to the European Parliament and the Council for their consideration and adoption. The Commission has proposed to fast-track this process to expedite the timeline for providing clear guidelines to companies.

Until then, the current CSRD rules remain in effect. Companies are still legally required to comply with CSRD if nation states have already transposed the CSRD into national laws.

How does this impact your business?

If you’re preparing for CSRD compliance, continue as planned— CSRD remains a valuable tool for structuring sustainability reporting. Even if it becomes voluntary, many companies view it as a gold standard that enhances strategic decision-making and investor confidence.

Want to stay ahead?

Regulatory landscapes are shifting fast. Staying informed is key to ensuring compliance and leveraging sustainability reporting as a strategic advantage.

Explore the full details:

• EU Press Release

• Official Omnibus Q&A

• Draft Proposal Omnibus I

If you are interested to read more about CBAM changes, click here.

For more insights on sustainability regulations and compliance strategies, follow my blog or connect with me on LinkedIn.

Final thoughts

The Omnibus package marks a strategic shift in EU sustainability regulations, reducing the sustainability requirements and easing compliance burdens for thousands of companies. While simplification is welcome, it shouldn’t come at the cost of progress. The EU maintains its commitment to sustainability, but experts worry these changes could weaken corporate commitments long-term. With fewer companies reporting on fewer datapoints, will sustainability remain a priority?

It will take time before the storm cools, but as this shift unfolds, we must stay focused on sustainability momentum and value. In the end, impact—not just compliance—is what truly matters.