The European Commission has unveiled a significant package of proposals aimed at simplifying EU regulations to enhance competitiveness and stimulate investment across the EU. The "Omnibus" initiative focuses on refining existing directives, particularly the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), to reduce administrative burdens while maintaining high standards of sustainability and transparency.
Why This Matters
These proposals aim to help businesses save time and money in meeting sustainability standards, ultimately contributing to more efficient operations and a more competitive EU economy. If adopted and implemented as set out today, the proposals are conservatively estimated to bring total savings in annual administrative costs of around €6.3 billion and to mobilize additional public and private investment capacity of €50 billion to support policy priorities.
Key Proposals At a Glance
CSRD Ammendments
The proposed amendments to the CSRD focus on reducing complexity, avoiding duplicative reporting, and ensuring proportionality for smaller businesses.
Scope reduction: The reporting requirements will now apply exclusively to large undertakings with more than 1,000 employees and either a turnover above €50 million or a balance sheet total above €25 million. This adjustment reduces the number of companies required to report by approximately 80%, aligning the scope more closely with the CSDDD thresholds.
Postponement of Reporting Deadlines: The application of all reporting requirements for companies scheduled to report in 2026 and 2027 (Wave 2 and Wave 3) to be postponed by up to two years. (Note: Current proposed changes in the Bulgarian Accountancy Act envisages a postponement of one year. )
Voluntary reporting standard: For companies no longer within the CSRD scope (those with up to 1,000 employees), the Commission will adopt a delegated act introducing a voluntary reporting standard. This standard, based on the SME standard developed by EFRAG, will limit the information that larger companies or banks can request from smaller entities in their value chains.
Revision of European Sustainability Reporting Standards (ESRS): The Commission commits to revising the ESRS to substantially reduce the number of data points, clarify ambiguous provisions, and enhance consistency with other legislation.
Elimination of Sector-Specific Standards: The proposal removes the empowerment for the Commission to adopt sector-specific standards, streamlining the reporting framework.
Assurance Requirements: The possibility of transitioning from a limited assurance requirement to a reasonable assurance requirement has been removed, simplifying compliance obligations.
The concept of double materiality—where companies assess both their impact on the environment and how sustainability risks impact their business—remains.
Removed obligations for smaller companies that are part of the value chain of reporting companies to provide information. Now reporting companies should collect data only from companies in their value chain that are also reporting under the CSRD.
CSDDD Adjustments
Transposition and Application Delay: The transposition deadline and the initial application of the CSDDD have been postponed by one year, now set to commence in 2028. This delay aims to provide member states and companies with sufficient time to prepare for and implement the due diligence requirements effectively.
Proportional Due Diligence Obligations: The revised directive introduces a tiered approach, where companies with over 1,000 employees or €300 million in net worldwide turnover are subject to comprehensive due diligence, while smaller entities face obligations commensurate with their size and resources.
Reduced burdens and trickle-down effects for SMEs and small mid-caps by limiting the amount of information that may be requested as part of the value chain mapping by large companies;
CBAM Simplifications
Exempt small importers from CBAM obligations, mostly SMEs and individuals.
Simplify the rules for companies that remain in CBAM scope: on authorization of CBAM declarants, as well as the rules related to CBAM obligations, including the calculation of embedded emissions and reporting requirements.
Enhancements to the EU Taxonomy Framework
Voluntary Taxonomy Reporting for companies with more than 1000 employees and a net turnover of up to €450 million.
Streamlined Classification Process: To facilitate easier identification of environmentally sustainable activities, the Commission plans to simplify the technical screening criteria within the EU Taxonomy and introduce a financial materiality threshold for the Taxonomy reporting.
Introduced simplifications to the most complex “Do No Significant Harm” (DNSH) criteria for pollution prevention and control related to the use and presence of chemicals that apply horizontally to all economic sectors under the EU Taxonomy.
Increased Transparency: Companies will benefit from clearer guidelines on how to classify their economic activities under the taxonomy, promoting consistency and comparability in sustainability reporting.
Next Steps
The legislative proposals are to be submitted to the European Parliament and the Council for their consideration and adoption. The changes on the CSRD, CSDDD, and CBAM will enter into force once the co-legislators have reached an agreement on the proposals and after publication in the EU Official Journal.
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