In February 2025, the European Commission presented a proposal for a comprehensive simplification package of legal standards (the “Omnibus“) that aims to simplify corporate sustainability reporting (ESG reporting) while maintaining the European Union’s sustainability objectives.
Although the exact wording of the Omnibus is still under discussion, we would like to give you a clearer view of the expected changes. In this article, we therefore break down what is currently known about the Omnibus, what its potential implications are for corporate sustainability reporting, and what businesses should consider.
About Omnibus in general
In January 2025, the European Commission published the European Union Competitiveness Compass, outlining its strategic plans for the next 5 years. The initiative aims, as its name suggests, to increase competitiveness and promote economic growth in the EU. The European Commission aims to simplify the regulatory environment and reduce the administrative burden by at least 25% for all businesses and at least 35% for small and medium-sized enterprises (the “SMEs“). The aim is to create a clearer and more efficient system that makes it easier for businesses to comply with their obligations without losing the quality or transparency of the information provided.
Following the publication of the Competitiveness Compass, on 26 February the European Commission presented the Omnibus containing proposals to ease the burden on businesses and to simplify the obligations under the Corporate Sustainability Reporting Directive[1] (the “CSRD“) and the Corporate Sustainability Due Diligence Directive[2] (the “CSDDD“). The Omnibus also includes proposals to simplify the obligations under the Taxonomy Regulation[3] (the “Taxonomy Regulation“), to simplify the Carbon Boundary Adjustment Mechanism[4] (the “CBAM“) and relax the obligations therein, and to optimise the European Union’s existing investment mechanisms.
The individual parts of the Omnibus
The Omnibus consists of 2 parts, Omnibus I and Omnibus II.
Omnibus I contains the draft Directive 2025/0044 and the draft Directive 2025/0045, mainly amending the CSRD, the CSDDD, and the Taxonomy Regulation. In addition, draft Regulation 2025/0039 amending the CBAM and draft delegated Regulation concerning the publication of information on taxonomy, climate taxonomy, and environmental taxonomy have been submitted.
Omnibus II includes the draft Regulation 2025/0040, which contains measures to simplify and optimise EU investment programmes such as InvestEU.
Main proposed changes
The Omnibus contains mainly proposals to postpone the entry into force of the CSRD, specific provisions of the CSDDD and the Taxonomy Regulation. In early April 2025, the European Parliament approved a deferral for the CSRD and CSDDD, as set out in more detail below. The proposal is also closely linked to the EU’s objectives on effective regulation, the Green Deal and the EU Sustainable Finance Action Plan.
The changes reflect the concerns of policy makers, industry, and other stakeholders about the cost and complexity of sustainability reporting obligations in the current geopolitical and economic context.
CSRD
The CSRD aims to ensure the reliability of information on companies’ exposure to climate-related risks and to improve transparency on the environmental and social impacts of corporate activities. Sustainability reporting obligations under the CSRD apply to large companies, listed SMEs, and non-EU companies, and are being phased in over several stages, varying according to the size and type of company.
The proposal amends the CSRD by deferring the application of all reporting requirements for businesses that are due to report in 2026 and 2027 (so-called wave 2 and 3) by two years. The purpose of the deferral is to prevent these undertakings from having to report for the financial year 2025 or 2026 and then being exempted from this reporting obligation because of the changes under the draft Directive 2025/0045 which will enter into force later. This will avoid unnecessary costs for these businesses.
The obligation to report on sustainability is now to be limited to large companies and parent companies of large groups as defined below.
Large enterprises are enterprises that meet at least one of the following conditions:
- more than 1,000 employees, and
- one of the following conditions:
- a net turnover exceeding EUR 50 million, or
- a balance sheet total exceeding EUR 25 million.
If it is the parent of a large group, the group must meet at least one of the following conditions based on the consolidated financial statements:
- more than 1,000 employees, and
- one of the following conditions:
- a net turnover exceeding EUR 50 million, or
- a balance sheet total exceeding EUR 25 million.
For the remaining companies, reporting is to be voluntary and they will have access to the Standard for SMEs developed by the European Financial Reporting Advisory Group (EFRAG).
The proposal further introduces:
- simplification under the European Sustainability Reporting Standards[5] (the “ESRS“);
- restrictions on the information that undertakings subject to CSRD obligations may request from other undertakings with fewer than 1,000 employees in their value chain; and
- abolition of the possibility to create a sector-specific ESRS.
CSDDD
The CSDDD is to be transposed into national law by 26 July 2026 and includes obligations on businesses relating to:
- human rights and environmental due diligence;
- integrating due diligence into corporate risk management policies and systems;
- identification and assessment of actual and potential adverse impacts and, where appropriate, identification of ways/possibilities for their prevention, cessation, and/or remediation;
- reporting mechanisms and procedures for complaints and communication; and
- developing and implementing a transition plan for climate change mitigation.
The application of CSDDD for enterprises is divided into the following waves:
- In the first wave, from 2027, the largest European companies with more than 5,000 employees and a global net turnover of more than EUR 1.5 billion must comply with the CSDDD;
- in a second wave from 2028, European companies with more than 3,000 employees and a net turnover of more than EUR 900 million must comply;
- in the third wave, from 2029, all other undertakings falling under the scope of the CSDDD must comply.
The proposal is to amend the CSDDD by postponing the entry into force of the CSDDD for wave 1 and wave 2 businesses by one year to July 2028. The purpose of the postponement is to give these businesses additional time to prepare for compliance. In addition, the proposal postpones the deadline for the transposition of the CSDDD into Member States’ national legislation by one year (until July 2027).
The proposal introduces several changes aimed at simplifying the due diligence requirements for sustainability. The main change is the extension of the intervals for regular assessment of the adequacy and effectiveness of measures from one year to five years. It also clarifies that companies must review and update their procedures if there are reasonable grounds to believe that they are no longer appropriate.
Other modifications limit the scope of information that businesses can request from small and medium-sized enterprises (SMEs) to only those specified in the VSME standard. The EU harmonised terms and conditions for civil liability are also abolished, leaving the decision on its application to national law. Finally, maximum harmonisation is extended to more key due diligence provisions, which will help ensure a level playing field for businesses across the EU.
Approval of deferral of CSRD and CSDDD
On 3 April 2025, the European Parliament has already approved the deferral part of the package for the CSRD and CSDDD, but without yet increasing the number of employees criterion to 1,000 for the CSRD. The 250-employee threshold remains in place until further amendment. Thus, for the second and third wave of companies, the application of the CSRD under the approved version will be deferred for two years, i.e. large companies with more than 250 employees will have to report for the first time on their social and environmental performance in 2028 for the previous accounting period, while small and medium-sized listed companies will have to provide this information one year later. Compliance with the obligations imposed by the CSDDD has been postponed by one year for both the first and second wave of companies affected by the rules, to 2028, according to the text published in February.
Taxonomy Regulation
According to the Taxonomy Regulation, obliged companies must disclose in their non-financial report information on how and to what extent their economic activities comply with the environmental sustainability criteria of the Taxonomy. The proposal postpones the above obligations under the Taxonomy Regulation for two years in line with the amended CSRD.
The proposal introduces an “opt-in” regime whereby companies that do not opt-in to taxonomy harmonisation would not have to report taxonomy-related key performance indicators at all.
In addition, the threshold for non-EU companies subject to the obligations is increased from EUR 150 million to EUR 450 million in EU turnover. There should also be a reduction of almost 70% in the number of data points thanks to the simplification of reporting templates.
Conclusion
Although the Omnibus brings relaxation of some regulatory obligations and postpones their implementation, sustainability remains a key issue for businesses, investors and financial institutions.
Businesses that proactively prepare for future requirements can not only gain better access to finance but also ensure their long-term competitiveness in the market. However, it should be borne in mind that the Omnibus is still only a proposal that must go through a long legislative process and may be substantially modified during that process.
A few days ago, the European Parliament approved the postponement of the CSRD and CSDDD, a move that still needs to be approved by the EU Council. We will continue to monitor further legislative progress for you.
If you have any questions about this topic or any other ESG-related issue, please do not hesitate to contact us.
[1] Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU as regards corporate sustainability reporting.
[2] Directive (EU) 2024/1760 of the European Parliament and of the Council of 13 June 2024 on corporate sustainability due diligence and amending Directive (EU) 2019/1937 and Regulation (EU) 2023/2859.
[3] Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 establishing a framework to facilitate sustainable investments and amending Regulation (EU) 2019/2088.
[4] Regulation (EU) 2023/956 of the European Parliament and of the Council of 10 May 2023 establishing a border carbon offsetting mechanism.
[5] Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive 2013/34/EU of the European Parliament and of the Council as regards sustainability reporting standards.
Mgr. Jakub Málek, managing partner malek@plegal.cz
Tereza Hrudková, legal assistant – hrudkova@plegal.cz
Rachel Kouklíková, legal assistant kouklikova@plegal.cz
10. 4. 2025