The “Omnibus” package changes non-financial reporting and ESG rules

While early last year the pan-European corporate world was focusing its eyes on the unfolding implementation and challenging requirements of the mandatory sustainability reporting from 2025 or 2026, the beginning of 2025 brings a significantly different trend, which should relieve especially smaller and medium-sized businesses from ESG obligations.

On 26 February 2025, the European Commission finally published its proposal, which was announced back in December 2024, with the working title “Omnibus I and II”.

The main aim of the package is, in particular, to strengthen the competitiveness and increase the prosperity of the EU economy, reduce administrative burdens, create space for European businesses to grow globally, while balancing the ambitious objectives of the Green Deal in the transition to a more sustainable economy. According to preliminary estimates by the European Commission, businesses are expected to save up to €6.3 billion per year in total administrative costs in relation to ESG reporting.

Content of the “Omnibus” package from a legislative perspective

• A proposal postponing the application of all reporting requirements under the CSRD (Corporate Sustainability Reporting Directive) for companies that are due to report in 2026 and 2027.
• A proposal postponing the transposition date and the first wave of application of the CSDDD (Corporate Sustainability Due Diligence Directive) by one year to 2028.
• Draft Directive amending the CSRD and the CSDDD.
• The draft delegated Act amending the taxonomy disclosures and the delegated Acts on climate and environment is subject to public consultation.
• Draft regulation amending the Carbon Border Adjustment Mechanism Regulation.
• Draft Regulation amending the InvestEU Regulation.

What are the main changes the package brings to the CSRD?

The package will bring a number of changes to the CSRD, which should make ESG reporting in particular easier to implement and more targeted to beneficiaries:

• Postponing the reporting requirements by two years (i.e. to 2028 and 2029 at the earliest) for large companies that have not yet started to implement the CSRD and for listed SMEs to give them time to approve the substantive changes proposed by the Commission.
  
  
• Reducing the scope of “obliged” companies and new size criteria, as reporting requirements should only apply to large companies with more than 1,000 employees and meeting at least one of the two criteria at the same time:
  1. Balance sheet total over EUR 25 million.
  2. Annual turnover over EUR 50 million.

This means that the number of the obliged businesses will be reduced by around 80%.

• The Commission is likely to adopt, by means of a delegated Act, a voluntary reporting standard applicable to enterprises no longer covered by the CSRD (up to 1,000 employees), based on the SME standard, which is also intended as a basis for collecting ESG data from business partners and suppliers.

• The Commission’s commitment to revise the European Sustainability Reporting Standards (ESRS) aimed at significantly reducing the number of data points, clarifying provisions considered unclear and improving consistency with other legislation.

• Deleting the requirement for sector-specific standards: The draft repeals the Commission’s power to adopt sector-specific standards.
  
  
• Duty to audit or to provide reasonable assurance: The draft repeals the possibility for the Commission to propose in the future a switch from limited/restricted assurance to reasonable assurance from external auditors.

• The double relevance concept remains.

What are the main changes in the taxonomy?

Companies within the future CSRD framework (large companies, with more than 1,000 employees) and with a net turnover of up to EUR 450 million are expected to report the taxonomy on a voluntary basis. This will significantly reduce the number of companies obliged to disclose their compliance with the EU taxonomy. In addition, companies that meet only certain taxonomy requirements may choose to voluntarily report their partial taxonomy compliance.

The Commission has also published for consultation the draft changes aimed at:

• simplifying taxonomy reporting templates, resulting in a reduction of data points by almost 70%.
• exempting businesses from taxonomy eligibility assessment and reconciliation of their economic activities that are not financially significant to their business (e.g. those that do not exceed 10% of their total turnover, capital expenditure or total assets).
• adjustments of key performance indicators of financial institutions, in particular the Green Asset Ratio (GAR) for banks.

The Omnibus also brings many other changes and simplifications to the rules in various areas, such as the CSDDD, a significant exemption in the EU Carbon Border Adjustment Mechanism (CBAM), and the release of €50 billion of funds within the InvestEU programme.

All these drafts are now subject to examination by the European Parliament and the Council. It is expected that key measures, such as the deferral of reporting requirements, will be approved quickly. Before final implementation, public feedback on simplifications regarding the taxonomy will be collected. The final step must be implementation in the national legislations of the Member States.