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Omnibus package explained: proposed changes to CSRD, CSDDD, and EU Taxonomy

The European Commission's Omnibus Package simplifies EU sustainability reporting by reducing CSRD scope, delaying deadlines, and offering voluntary Taxonomy reporting for some businesses.
Omnibus
Category
Blog
Last updated
February 27, 2025

On February 26, 2025, the European Commission introduced a proposal for the first “Omnibus” Package on sustainability regulation and reporting. This proposed legislation includes significant amendments to the Corporate Sustainability Due Diligence Directive (CSDDD), the Corporate Sustainability Reporting Directive (CSRD), and the EU Taxonomy Regulation.

If adopted, the Omnibus Package would simplify compliance, reduce administrative burdens, and ensure greater alignment between EU sustainability laws. Key proposed changes include narrowing the CSRD’s scope, postponing certain implementation deadlines, and making EU Taxonomy reporting voluntary for certain companies. Below, we explore the main elements of this proposal and its potential impact on businesses like yours.

Key proposed changes at a glance

The Corporate Sustainability Reporting Directive (CSRD)

  • Implementation delay: The application of CSRD reporting requirements for companies due to report in 2026 and 2027 (“Wave 2 and 3” companies) would be postponed by two years. This postponement is intended to allow companies more time to provide high-quality sustainability information to both investors and other stakeholders.
  • Reduction in reporting scope: Only large undertakings with more than 1,000 employees (and either a turnover above €50 million or a balance sheet total above €25 million) would be required to report under the CSRD, reducing the number of affected companies by approximately 80%.
  • Voluntary reporting for VSMEs: The Commission will introduce a voluntary ESG reporting standard for VSMEs (companies with fewer than 1,000 employees), limiting data requests from larger CSRD-covered firms.

The CSDDD

  • Focus on direct suppliers: Companies in the CSDDD’s scope would only be required to monitor their direct suppliers. Improved transparency and accountability in supply chain monitoring will benefit both investors and other stakeholders.
  • Reduced compliance frequency: The requirement to assess supply chain impacts would occur once every five years for companies with more than 500 employees, rather than annually. Ad hoc assessments will be carried out “where necessary”.

The EU Taxonomy

  • Voluntary alignment for certain companies: Businesses within the future CSRD scope (large companies with more than 1,000 employees) and a net turnover of up to €450 million would be able to report on Taxonomy alignment voluntarily rather than being required to do so. Non-EU companies with significant business activities or turnover in the EU will continue to be subject to the same corporate sustainability reporting requirements as EU companies under the CSRD. Voluntary Taxonomy reporting will provide valuable sustainability information to both investors and other stakeholders.
  • Reduction in reporting complexity: The European Commission proposes to simplify Taxonomy reporting templates, reducing the total number of data points by nearly 70% and exempting companies from reporting on financially immaterial activities (those making up less than 10% of turnover, capital expenditure, or total assets).
  • Changes to financial institution reporting: Adjustments to the Green Asset Ratio (GAR) for banks would allow them to exclude exposures related to companies that are no longer set to be in scope under the revised CSRD.

Omnibus Regulation

Additional proposed regulatory amendments

  • Sector-specific sustainability reporting standards removed: The proposal deletes the possibility for the European Commission to develop sector-specific ESRS standards. The Non-Financial Reporting Directive (NFRD) initially established reporting principles for large companies, but due to insufficient and often unreliable information, the more comprehensive CSRD was introduced to enhance transparency and accountability in sustainability reporting. The removal of sector-specific ESRS standards is intended to simplify reporting and improve transparency for both investors and other stakeholders.
  • Simplified assurance requirements: The European Commission would not move from limited assurance to reasonable assurance as initially planned, which will reduce audit-related burdens on companies.

More on the proposed CSRD amendments

Below we outline further implications for companies subject to the CSRD:

European Sustainability Reporting Standards (ESRS) revisions

The European Commission proposes to revise the ESRS to:

  • Reduce the number of data points required in sustainability reports “substantially”.
  • Clarify unclear provisions to improve consistency with other legislation.
  • Streamline sustainability information reporting by eliminating sector-specific requirements.

These revisions are intended to make sustainability reporting more proportionate and less complex, while still ensuring that stakeholders have access to the most relevant environmental information. Additionally, the revisions aim to improve transparency and accountability, to the benefit of both investors and other stakeholders.

Double materiality principle remains unchanged

Despite other proposed revisions, the “double materiality” principle—which requires companies to report both on how sustainability issues impact their business, and how their operations affect the environment and society—remains in place. This ensures that EU member states continue to uphold high standards for sustainability performance disclosure. The double materiality principle ensures that companies provide valuable sustainability information to both investors and other stakeholders.

Proposed implementation timeline

If, as is expected, the Omnibus Package proposal is adopted, it would adjust the implementation schedule for sustainability reporting obligations.

This adjusted implementation schedule will allow many companies more time to provide high-quality sustainability information to both investors and other stakeholders.

Proposed timeline adjustments

2026-2027 (“Wave 2 and 3” companies): Reporting obligations postponed by two years.

2028: New transposition deadline for the first phase of CSDDD application.

These delays would give businesses additional time to comply with evolving EU directives and integrate sustainability performance reporting into their corporate strategies. The postponement of reporting obligations will also allow companies more time to provide high-quality sustainability information to both investors and other stakeholders.

Practical considerations for businesses

If the Omnibus Package proposal is adopted, businesses operating in EU member states will need to adjust their sustainability reporting and due diligence strategies accordingly. It is essential for businesses to consider the impact of these changes on both investors and other stakeholders.

What companies should do next regarding sustainability information

  • Assess whether they are still in scope under the revised CSRD thresholds (1,000+ employees, €50M+ turnover, or €25M+ balance sheet total).
  • Review supply chain monitoring processes to ensure compliance with the updated CSDDD obligations (focusing on direct suppliers only).
  • Prepare for potential voluntary Taxonomy reporting if they wish to showcase sustainability performance progress.
  • Monitor ongoing legislative developments to stay ahead of further EU sustainability legislation changes.
  • Continue to be mindful of other European sustainability reporting standards, such as the Sustainable Finance Disclosure Regulation, which remain unchanged. 

Companies should ensure that their sustainability information is valuable to both investors and other stakeholders.

A step toward simplification

The Omnibus Package proposal, if adopted, would introduce major simplifications to EU sustainability reporting by reducing the scope of CSRD, streamlining CSDDD due diligence obligations, and making EU Taxonomy reporting voluntary for certain companies.

While these proposed changes aim to ease compliance burdens, businesses must remember that regardless of legislation, carbon and ESG management makes good business sense. Accurate reporting of ESG metrics is crucial in promoting sustainable investments, as reliable data helps investors assess the sustainability impacts of their portfolios. These changes also aim to improve transparency and accountability, benefiting investors, customers and other stakeholders.

Please note that the Omnibus proposal is still under discussion, and businesses should stay informed as policymakers debate the final details of the package. We will keep you updated as new information emerges.

Sweep can help

Sweep is a carbon and ESG management platform that empowers businesses to meet their sustainability goals.

Using our platform, you can:

  • Conduct a thorough assessment of your carbon footprint.
  • Get a real-time overview of your supply chain and ensure that your suppliers meet your sustainability targets.
  • Reach full compliance with the CSRD and other key ESG legislation in a matter of weeks.
  • Ensure your sustainability information is reliable by having it verified by a third party before going public.
See how we can help you on your sustainability journey