On 26 February 2025, the European Commission introduced the “Omnibus I” simplification package, proposing substantial amendments to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). This initiative seeks to alleviate administrative burdens on companies, bolster competitiveness, and uphold the EU’s commitment to its sustainability objectives.
The proposed changes to the CSRD aim to streamline reporting requirements for businesses. One of the key revisions involves increasing the reporting threshold to companies with more than 1,000 employees and either €50 million in turnover or €25 million in assets. This adjustment would exempt approximately 80% of companies from the directive’s scope. Additionally, the European Commission proposes to extend reporting deadlines for ‘wave 2’ and ‘wave 3’ companies by two years, shifting the application of reporting requirements to 2028.
The European Sustainability Reporting Standards (ESRS) would be revised to reduce mandatory data points. Sector-specific standards would also be removed to further streamline reporting obligations. Another significant adjustment involves the assurance requirements, as the transition from limited to reasonable assurance on sustainability reporting would no longer be mandatory. Instead, targeted assurance guidelines are expected to be issued by 2026.
The Corporate Sustainability Due Diligence would also be amended to address issues such as extending the scope of harmonised requirements to limit the possibility of gold-plating, limiting risk assessment to Tier 1 (with a few exceptions), reducing the scope of stakeholder engagement requirements and other changes related to financial penalties and liability regime. Other changes such as a review clause for financial services will also be discussed.
The co-legislators already agreed on the so-called “Stop-the-clock” Directive, which forms part of the Omnibus 1, and which will allow more time to discuss the rest of the proposal. The Directive postpones by two years the entry into application of the CSRD requirements for large companies that have not yet started reporting, as well as listed SMEs, and by one year the transposition deadline and the first phase of the application (covering the largest companies) of the CSDDD.
The Omnibus I proposals are now subject to approval by the European Parliament and the Council of the European Union. The legislative process is expected to spark considerable debate among Member States, with some advocating for the preservation of robust sustainability standards while others emphasise the importance of reducing regulatory burdens to enhance competitiveness.