EU Omnibus Update: What companies need to know
The EU-Omnibus
On February 26, 2025, the European Commission published its Omnibus draft to simplify sustainability reporting regulations. The proposal introduces several changes to the CSRD, EU Taxonomy, CSDDD, and CBAM. The goal is to reduce reporting obligations by 25% for large companies and by 35% for small and medium-sized enterprises (SMEs).
Overview of the key proposed changes
CSRD
- Only companies with more than 1,000 employees that either have over €50M in turnover or over €25M balance sheet will fall under the CSRD, regardless of their legal form. This would mean:
- No changes to the timeline for companies that currently fall under the NFRD and have more than 1,000 employees.
- For all other companies with more than 1,000 employees, the first reporting year would be postponed by two years, shifting to fiscal year 2027.
- Companies with 1,000 or fewer employees would no longer be subject to CSRD reporting requirements, including listed SMEs.
- Companies from third-countries would only be required to report if they generate more than €450M in revenue within the EU, or have a subsidiary or branch in an EU member state with revenue exceeding €50M.
- All other companies are recommended to report according to a voluntary reporting standard, which will be based on the VSME. Suppliers of companies subject to CSRD should only be asked to provide information according to these voluntary standards.
- Auditors should only conduct a limited assurance audit. The potential expansion of the audit requirement to reasonable assurance will not be pursued. Instead, specific guidelines for auditors are planned to be published in 2026.
- Sector-specific standards shall be discontinued, and the number of ESRS data points shall be revised. However, the Double Materiality Analysis will remain the foundation for sustainability reporting.
EU Taxonomy
- The reporting obligation shall be limited to companies with more than 1,000 employees and over €450M in revenue.
- For companies with more than 1,000 employees but less than €450M in revenue, reporting under the EU Taxonomy shall become voluntary.
- It would be sufficient to determine the taxonomy-aligned share of revenue and CapEx, while the assessment of the taxonomy-aligned share of OpEx will become voluntary.
- Companies may also indicate that only parts of the Technical Screening Criteria (TSC) have been implemented to demonstrate their progress toward taxonomy alignment.
- Reporting templates and Do No Significant Harm (DNSH) criteria will be simplified.
CSDDD
- The deadline for transposing the CSDDD into national law shall be postponed to mid-2027. As a result, the application for companies with more than 5,000 employees shall also be delayed by one year, shifting to the fiscal year 2028.
- Due diligence obligations shall be limited to direct suppliers (Tier 1). The frequency of supplier audits shall be extended from every year to every five years.
- To keep the reporting burden manageable for suppliers with fewer than 500 employees, only information requirements from the VSME shall be requested.
CBAM
- CBAM reporting shall be limited to importers with over 50 tons of imported goods per year.
Next steps in the parliamentary process
The proposals will now be discussed and must be approved by both a simple majority in the European Parliament and a 55% majority in the Council of the European Union (i.e., 15 out of 27 member states). These states must also represent at least 65% of the European population. A decision is expected by mid-year. Afterward, the new regulation must be transposed into national law, for which the proposal provides a 12-month deadline.
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