What is the impact of the Omnibus initiative on the CSRD?
On Feb. 26, 2025, the European Commission published the first measures of the so-called “Omnibus Simplification Package". With this package of measures, the Commission aims, among other things, to simplify EU-CSRD rules, boost competitiveness and free up additional investment capacity. The changes, as proposed in the draft Omnibus package, concern among the CSRD, the CSDDD, the EU Taxonomy and the CBAM, among others. We would like to explain the impact of the Omnibus initiative on the Corporate Sustainability Reporting Directive (CSRD).
What is Omnibus CSRD?
The European Commission's Omnibus initiative brings together and simplifies existing sustainability guidelines, such as the CSRD, CSDDD and the EU Taxonomy.
Goal of the Omnibus Initiative for Europe: less hassle, more clarity and more efficient reporting
European legislation imposes administrative burdens on business. On September 9, 2024, the Draghi Report was published, in which the former Prime Minister of Italy and former President of the European Bank concluded that the competitiveness of the European Union can be strengthened by simplifying European legislation. The Omnibus initiative should make a significant contribution to this. These first Omnibus packages bring together concrete proposals to significantly simplify rules around sustainable financing, due diligence, the EU taxonomy, carbon border adjustments and European investments. It also affects the Corporate Sustainability Reporting Directive (CSRD).
European Commission President Ursula von der Leyen says of the Omnibus package, “Simplification promised, simplification delivered! We present our first proposal for far-reaching simplification. EU companies will benefit from streamlined rules for sustainable finance reporting, sustainability due diligence and taxonomy. This will make life easier for our businesses while ensuring that we stay firmly on track to meet our decarbonization goals. And more simplification is on the way.”
What does the CSRD entail again?
In November 2022, the European Union adopted the Corporate Sustainability Reporting Directive (CSRD) as an extension of the Non-Financial Reporting Directive (NFRD). This directive states that starting in 2024, more and more companies will be required to report on the impact of their activities on people and the environment. The CSRD Directive requires large companies to report on issues such as carbon emissions and social capital, as well as the impact you as a company have on biodiversity and human rights violations in the supply chain. The CSRD Directive is at the heart of the European Union's Green Deal and is intended to ensure greater transparency about and better quality of sustainability information. Read more about it in this blog.
How the EU Omnibus affects CSRD regulations
The biggest change in the CSRD area that the European Commission is proposing with the Omnibus package is the narrowing of the scope. The EU wants the CSRD to apply primarily to the largest companies. The idea is that the largest companies are likely to have the greatest impact on people and the environment. The reporting requirements should apply to companies that have more than 1,000 employees (currently the limit is 250 employees) and also have a turnover of more than 50 million euros or a balance sheet total of more than 25 million euros. Specifically, this means that about 80% of companies will be removed from the scope of the CSRD for now.
Does Omnibus mean delay and annulment?
For those companies currently under the scope of the CSRD that will have to report from 2026 or 2027, the European Commission's Omnibus package proposes a two-year postponement (until 2028) so that they don't do reports that will later prove redundant if the law is changed. For these companies, it makes this period somewhat uncertain because it is not certain whether they will really be exempted from the reporting requirement. Therefore, these companies would still do well to prepare for CSRD reporting as much as possible. The right CSRD software can help with this.
Protecting smaller companies from being overcharged by supply chain partners
All companies with less than 1,000 employees are currently outside the scope of the directive. In practice however, many of these companies are subject to sustainability information requests when they are part of the value chain of larger companies or of financial institutions, such as banks, which do fall within the scope of the directive.
Omnibus seeks to address “trickle-down” effect
The Omnibus package on CSRD will address this “trickle-down” effect by preventing all out-of-scope companies from being subject to excessive reporting requests. The Commission will establish a voluntary standard for all out-of-scope companies. Larger companies cannot request information beyond the information required for the voluntary VSME standard.
CSRD and taxonomy reporting.
The Omnibus Package for Europe also includes changes to the CSRD regarding taxonomy reporting in derogation of Article 8 of the Taxonomy Regulation. The European Commission proposes to exempt companies within the scope of the CSRD from reporting obligations under the EU Taxonomy. The new Omnibus proposal allows companies falling within the future scope of the CSRD (large companies with more than 1,000 employees), with net sales of up to 450 million, to voluntarily report on the EU Taxonomy. This will allow companies that are already taking steps towards sustainability to demonstrate their efforts and gain recognition, without having to meet all the obligations immediately. Moreover, the European Commission is working on clear guidelines so that reporting is transparent and comparable.
What is the payoff from the Omnibus CSRD plans?
The European Commission hopes to achieve substantial cost savings for companies through these Omnibus proposals. The total annual cost savings from the changes to the scope of the CSRD and future changes to the ESRS could be around €4.4 billion. This consists of annual cost savings of €0.8 billion due to the narrower scope of Taxonomy reporting. On top of these recurring savings are the one-time cost savings related to setting up the reporting and assurance processes that would be avoided for exempt companies, which amount to about €1.6 billion related to the CSRD/ESRS and €0.9 billion for the Taxonomy.
When will these Omnibus measures take effect on the CSRD?
With the Omnibus measures, legislation must be adapted. The European Commission cannot do that by itself. That is why the legislative proposals have now been submitted to the European Parliament and the Council. The amendments relating to the CSRD, CSDDD and CBAM will enter into force once the co-legislators have agreed on the proposals and after publication in the Official Journal of the EU. Subsequently, member states will have to implement the new law into local legislation within 12 months. The European Commission has called on the co-legislators to treat this Omnibus package as a priority.
Sustainability reporting will continue
Thus, with this Omnibus proposal, it is currently uncertain for a large number of companies whether they will fall under the scope of the CSRD anytime soon. At the same time, we see that sustainability reporting has become an integral part of international trade. Should companies decide not to report in accordance with the rules, this could cause problems throughout the chain of which they are a part. For multinationals operating in multiple member states, it could also cause problems if they decide not to report.
In short, by making the right preparations now, you can ensure that you don't have to play catch-up later to avoid sanctions. Moreover, you are working to set yourself apart by demonstrating what your company is already doing when it comes to sustainability initiatives. This means that as a company you can distinguish yourself in the area of sustainability by taking into account factors such as energy consumption, climate impact, availability of raw materials, health and safety of people and good corporate governance when selecting and managing business activities. By integrating these elements into your business operations, you demonstrate that you are not only economically driven, but also consciously deal with your people and social and environmental challenges.
So: what should I do under Omnibus as a business or entrepreneur?
The Omnibus proposal does not change the why of sustainability reporting, but it does change who must comply with it. This provides an opportunity for companies to not only comply with regulations, but rather to make sustainability demonstrable and create impact. In the current CSRD proposal, the reporting requirement applies to companies that meet at least two of the three criteria on a consolidated basis: more than 50 million turnover, 25 million balance sheet total and/or 250 employees. For companies outside this new scope, this does not mean that sustainability is less relevant. They can still be surveyed on specific topics, as detailed in EFRAG's VSME guidelines. These guidelines will soon be proposed as a legislative proposal by the European Commission. We see this moment as a great opportunity for companies to look beyond obligations and strategically embed sustainability. By acting proactively, you do not only meet future requirements, but you create and make a positive impact.
Here's how Stainable helps you
Stainable is the first Legal & Automated Compliance platform that focuses entirely on translating European legislation in the field of ESG. We make complex (European) legislation and regulations regarding sustainability accessible. Using our smart technology, we translate legislation into a fill-in-the-blank exercise that everyone understands. We help you contribute to a more sustainable world and comply with reporting requirements (SFDR, CSRD, EU Taxonomy Dupa 2.0). Simply Comply!
Want to know more about Omnibus, CSRD and SFDR?
Want to know more about Omnibus, CSRD, SFDR and how you can make your sustainability ambitions visible in an easy way? Please contact us, we are very happy to assist you!
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