European Commission’s Omnibus Regulation: Key Insights We Have So Far

Last update: March 2025

Sustainability reporting in the European Union is undergoing significant change with the recent proposal of the EU Omnibus Package on Sustainability. This package, introduced on February 26th, aims to simplify and refine the existing sustainability regulations such as the Corporate Sustainability Reporting Directive (CRSD), The Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy while easing compliance burdens for businesses. Understanding these changes is crucial if your organisation is subject to the CSRD or other EU sustainability frameworks.

Table of contents:

• A Shift in EU Sustainability Priorities
• Key Components of the Omnibus Package
• What This Means for Your Business
• The Importance of ESG Data Collection
• Next Steps: Stay Informed and Proactive
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A Shift in EU Sustainability Priorities

To understand what has changed, we first need to delve into the most recent European Commission presidencies. The European Commission’s first term under Ursula von der Leyen (2019-2024) placed a strong emphasis on sustainability and the EU Green Deal in particular, aiming to make the EU the first carbon-neutral economy by 2050. This led to the adoption of key regulations, including CSRD, CSDDD, and the EU Taxonomy. However, the second term of the von der Leyen Commission (2024-2029) is shifting focus towards reducing administrative burdens and enhancing European businesses’ competitiveness.

The Omnibus Package is the first step in this direction, aiming to simplify sustainability reporting requirements without abandoning the EU’s commitment to sustainability. Without further ado, let’s dig into this new omnibus package. 

Key Components of the Omnibus Package

The Omnibus package consists of two key proposed directives:

1. The Sustainability Reporting Simplification Proposal
2. The "Stop the Clock" Proposal

These proposals directly impact companies subject to CSRD, CSDDD, and the EU Taxonomy, bringing significant modifications to reporting obligations.

1. Sustainability Reporting Simplification Proposal

The simplification proposal introduces several changes to CSRD and EU Taxonomy reporting requirements:

• Scope Reduction: Companies with fewer than 1,000 employees could be exempt from CSRD obligations. Previously, thresholds were lower, covering more businesses.
• Streamlined Reporting: The number of data points required in CSRD reports could be reduced by 25%, prioritising quantitative over qualitative disclosures.
• Value Chain Cap: The maximum amount of sustainability-related information that large companies can request from voluntary reporters in their value chain could now align with voluntary reporting standards.
• Assurance Requirements: The transition to reasonable assurance (a stricter verification process) could be removed, and limited assurance (a lighter verification process) remains the standard.
• Sector-Specific Standards Removed: The requirement for sector-specific standards by 2026 could be eliminated.
• Listed SMEs: The LSME standards could be eliminated.

For EU Taxonomy reporting, changes include:

• Updated Thresholds: Only companies with more than 1,000 employees and over €450 million in revenue could be required to fully report.
• OpEx Reporting: Could be only required if eligible activities make up more than 25% of total turnover.
• Simplified Reporting Templates: A 70% reduction in required data points could be expected.

2. The "Stop the Clock" Proposal

This proposal focuses on delaying the implementation of CSRD and CSDDD for certain companies:

The second wave of CSRD companies, covering non-listed with more than 250 employees, could have their reporting obligations postponed from 2026 to 2028. Similarly, the third wave, which includes SMEs, could be delayed from 2027 to 2029. However, first-wave reporters, large listed companies with more than 500 employees, could remain unaffected by these delays.

The CSDDD could also face delays, with its transposition deadline extended from July 2026 to July 2027. Additionally, due diligence requirements for larger companies will be postponed by one year, allowing more time for implementation and compliance adjustments.

What This Means for Your Business

Given the regulatory uncertainties, companies must adopt a strategic approach. Depending on company size and status, different actions should be considered:

1. Large Listed Companies (500+ Employees)

Large listed companies with more than 500 employees must continue their CSRD compliance efforts as planned, as no delay applies to them. They should also stay informed about potential simplifications in 2025 and use ESG reporting to unlock financial benefits and operational efficiencies.

2. Non-Listed Companies (1,000+ Employees)

Non-listed companies with more than 1,000 employees will likely still be subject to CSRD but with simplified reporting requirements. They should continue their preparations while closely monitoring regulatory developments and focus on "no-regret moves" such as data collection and gap analysis to ensure compliance readiness.

3. Mid-Sized Companies (250-1,000 Employees)

Mid-sized companies with 250 to 1,000 employees may be removed from CSRD scope if the simplification proposal is adopted. These companies should consider voluntary reporting under the new voluntary standard, which will be based on the existing VSME (Voluntary Sustainability Reporting Standard for SMEs), a lighter and framework for smaller businesses. Regardless of whether they fall within the mandatory scope, they should maintain ESG data collection efforts for financial and commercial benefits.

The Importance of ESG Data Collection

Even with potential regulatory changes, sustainability data remains critical for businesses. Here’s why:

• Regulatory Compliance: Until new rules are officially adopted, current CSRD obligations remain in force. The process can be long and we are only at the beginning of it. 

• Operational Efficiencies: ESG data can reveal cost-saving opportunities in resource use and operational efficiency.
• Access to Capital: Investors and financial institutions increasingly require ESG disclosures.
• Competitive Advantage: Large companies will continue to seek sustainable suppliers, making ESG performance a differentiator.
• Talent Acquisition & Retention: Employees prefer companies with a strong sustainability focus.

Next Steps: Stay Informed and Proactive

As these proposals undergo legislative review by the European Parliament and Council, the final scope and timing remain uncertain. Businesses should:

• Monitor legislative developments to stay ahead of changes.
• Continue ESG data collection for internal insights and stakeholder demands.
• Engage with industry experts to prepare for future regulatory requirements.
• Consider voluntary reporting frameworks to maintain sustainability momentum.

Want a bit more information about the proposed Omnibus package? Watch our on-demand webinar here.

If you would like to discuss with a member of our team of ESG experts, feel free to book a call with us.