On Wednesday, the Commission outlined its new plans. with the release of the first Omnibus package. The proposed changes are substantial and will impact many companies that have already started on their sustainability journeys. There are many questions on what exactly will change, what that means and how to move forward. In this news flash we hope to update you on the key changes and propose a view on initial next steps.
The sustainability Omnibus
In the context of geopolitical developments, The European Commission acts on the need to increase EU’s competitiveness, while holding true to the objectives of the EU Green Deal.
As part of the EU Competitive Compass, published on 29th January 2025, three Omnibus packages were announced. On 26th February, the first of these was released which covers: the CSRD, EU Taxonomy, CSDDD, CBAM and a proposed simplification and optimisation of the EU investment programs
Proposed changes to the CSRD
There are two key proposals released. The first one, the “stop the clock” proposal is focused on countries that have already transposed the CSRD and proposes a 2-year delay for wave 2 and wave 3 companies, with the first reports (wave II) now expected for FY2027, as opposed to FY2025. This proposal should see an accelerated process to allow the relieve to come in time to alter the existing reporting obligation timeline of FY25 (for countries where the regulation has already transposed, which does not include the Netherlands, where the law has not yet been tranposed).
The second proposal includes a significant scope reduction, both in companies in scope as well as mandatory datapoints. The in-scope companies will be essentially limited to companies with over 1000 employees and either EUR 50 mio turnover and/or EUR 25 mio asset base.
The table below shows the old scoping and the proposed new scoping:
| Wave | Old scoping | Proposed new scoping |
| Wave 1: large PIEs and large issuers | Large PIEs and large issuers with over 500 employees | +1,000 employees AND either +EUR 50 mio turnover OR +EUR 25 mio asset base |
| Wave 2: other large companies | Other large companies meeting 2 of 3 criteria: +EUR 50 mio turnover +EUR 25 mio asset base +250 employees |
+1,000 employees AND either +EUR 50 mio turnover OR +EUR 25 mio asset base |
| Wave 3: listed SMEs | SME with listed equity or bonds on EU regulated market | No longer in scope |
| Wave 4: non-EU parent | In scope if +EUR 150 mio turnover is generated in EU and having at least one in-scope EU subsidiary, or branch with EUR 40+ mio turnover | In scope if +EUR 450mio is generated in EU and having at least one large EU subsidiary, or branch with EUR 50+ mio turnover |
Other proposals include:
CSRD/ESRS
No sector specific standards will be released. Reporting on additional topics might still be relevant, yet voluntary, and could be based on ISSB (and SASB).
All entities in the value chain with less than 1,000 employees cannot be required to provide more information than listed in the VSME standard.
Number of datapoints in ESRS to be significantly reduced by three proposed actions: removing those deemed least important, prioritising quantitative over narrative and further distinguishing between mandatory and voluntary datapoints. This will also impact wave I companies, however the details of the reduction are still unknown.
Standard for listed SMEs (LSME) discontinued. Voluntary standard for SMEs (VSME) to be adopted and published as EU delegated act. Expected to be released soon for voluntary reporting for out-of-scope companies.
Discontinued as listed SMEs will no longer be in scope.
Reasonable assurance will not become mandatory, obligation for limited assurance for in scope companies will remain and targeted assurance guidelines are expected to be published by 2026.
EU Taxonomy
Mandatory for companies with over 1,000 employees and over EUR 450 mio turnover. Voluntary for companies with over 1,000 employees and less than EUR 450 mio turnover, and simplified to only include Turnover and CapEx KPI
Materiality of 10% introduced: if an activity represents less than 10% of Turnover, CapEx or OpEx. For financial undertakings, this rule would permit them not to assess compliance with the Taxonomy criteria of 10% of their assets. It would also allow certain financial undertakings subject to several KPIs, such as credit institutions not to report certain KPIs capturing activities that are not material for their business. Additionally, Non-Financial undertakings are allowed not to report on alignment of OpEx if the cumulative turnover of their eligible activities do not exceed 25% of their total turnover
Appendix C with respect to pollution prevention and control related to the use and presence of chemicals is proposed to be revised and simplified
Significantly simplification of the reporting templates for both corporates and financial institutions, reduction of several separate and duplicative templates to be reported as well as simplifying the tables, leading to a reduction of data points by almost 70%.
CSDDD
Application for the largest companies is delayed by a year to July 2028, with publication of due diligence guidance by the Commission to be brought forward to July 2026.
Companies only required to assess impacts from direct business partners unless there are credible risks involving indirect partners. If direct business partners are SMEs (<500 employees), companies may only request information as listed in the Voluntary CSRD standard for SMEs
EU-wide regime removed, with regime left to the discretion of member states.
Alignment of requirements on adoption of transition plans with the CSRD, with the obligation to ‘put into effect’ credible transition plans changed to a requirement to ‘adopt’ with ‘implementing actions.’
Frequency of periodic assessments and updates reduced from one year to every five years, unless....
Engagement now limited to ‘individuals directly affected’ (i.e. excluding consumers, national human rights and environmental institutions, civil society organisations).
In the case of both actual and potential adverse impacts, companies can suspend partnerships rather than cut ties
The Commission is no longer required to consider more tailored due diligence rules for the financial services sector.
Member States are restricted from introduction more stringent rules to tackle human rights and environmental abuse.
Next steps: what should you do
If the proposal goes ahead as planned, this means a significant decrease of the number of in scope companies. At the same time, the strategic benefit of structurally collecting relevant steer information on sustainability and effectively managing sustainability related impacts, risks and opportunities does not disappear. In a world increasingly seeing the impact of climate change, biodiversity decline and social unrest, a focus on sustainability is not (just) a compliance exercise but a strategic endeavour.
We recommend companies to first make a structural assessment of what the factual compliance situation is and monitor developments carefully. Based on the new compliance context and your ambition as a company, new priorities and the scope and pace of your sustainability reporting project can be determined.
