Simplification of Sustainability Reporting Requirements by the EU’s Omnibus Package

On 26 February 2025, the European Commission adopted the Omnibus package, a set of proposals aimed at reducing the administrative burden on companies regarding sustainability reporting. This package introduces adjustments to the Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy, and the Corporate Sustainability Due Diligence Directive (CSDDD).

The proposal will now be submitted to the European Parliament and the Council for their consideration and adoption. Although the Commission calls for priority for swift processing, the exact timeline for approval has not yet been established.

If the Omnibus proposal is adopted, what will be the implications for CSRD and EU Taxonomy?

The criteria determining which companies fall under the CSRD are changing: 

• The employee threshold will increase from 250 to 1,000 employees. 
• Companies must also meet at least one of the following financial criteria: 
  • Balance sheet total > €25 million 
  • Turnover > €50 million 
• In other words: if your company has more than 1,000 employees and meets one of the two financial criteria, it will fall under the reviewed scope of the CSRD. 

Further key changes: 

• Postponement of CSRD reporting obligations by two years (for so-called wave 2 en 3).

• Audit will be limited to limited assurance.

• Increased turnover threshold for non-EU companies: 

  • The threshold for non-EU companies operating within the EU will rise from €150 million to €450 million. 

• Sector-specific ESRS standards scrapped: 

  • Previously, the CSRD required sector-specific European Sustainability Reporting Standards (ESRS). These sector-specific standards will no longer be implemented. 

• Adjustments to ESRS requirements and fewer mandatory data points 

If your company falls under the CSRD, it will still be required to report on the EU Taxonomy, but with changes and exemptions.  

• Companies with more than 1,000 employees but less than €450 million in turnover will be exempted from EU Taxonomy reporting. 
• The effective date for EU Taxonomy obligations will be postponed by two years, aligning with the CSRD delay. 
• Simplifications in technical screening criteria:  
  • Fewer mandatory data points 
  • More straightforward criteria for the Do No Significant Harm (DNSH) assessment

The European Commission’s proposal is expected to have a significant impact on sustainability reporting requirements for companies. These simplifications will come into effect once approved by the European Parliament and the Council of the EU.

If adopted:

• Companies with more than 1,000 employees and meeting the financial criteria will have their CSRD obligation postponed by two years.
• Companies with fewer than 1,000 employees will not be subject to mandatory CSRD reporting, meaning they will also be exempt from external assurance requirements on sustainability reports.

While companies outside the CSRD scope due to the Omnibus package will no longer have a mandatory reporting obligation, the European Commission encourages voluntary reporting, potentially using the Voluntary Standard for SMEs (VSME), which aligns with CSRD principles. Companies may also voluntarily choose to report under the full ESRS framework.

We understand that these changes may raise questions about their specific impact on your company. Our team is ready to assist you. Feel free to contact our ESG expert, Philip Dooms, for any questions or to assess the impact on your specific situation.

Sources: 

• EC press release
• EC omnibus Q&A