CSRD Omnibus: What the EU proposal means for companies

The most important facts about the CSRD omnibus proposal in brief

The European Commission’s CSRD Omnibus proposal is intended to relieve companies of bureaucratic hurdles and simplify sustainability reporting in the EU. The most important changes at a glance:

Numerous companies exempt from CSRD reporting requirements: According to the proposal, only companies with over 1,000 employees are required to report. This would reduce the number of companies that have to publish a sustainability report by 80%.
Later reporting obligations: Companies do not have to report for the 2027 financial year until 2028.
Fewer reporting obligations: 25% fewer data points, no sector-specific standards, limitation of supply chain reporting obligations.
No stricter review: The planned “Reasonable Assurance” is no longer applicable, “Limited Assurance” remains.
EU taxonomy simplified: OpEx reporting obligation only for ≥ 25% taxonomy-eligible turnover, materiality threshold, voluntary reporting possible.
CSDDD relaxations: Due diligence obligations only for direct business partners, no EU-wide liability, inspections only every 5 years.

The Corporate Sustainability Reporting Directive (CSRD) represents a milestone in European sustainability reporting. It was introduced to oblige companies to be more transparent with regard to their environmental, social and corporate responsibility (ESG criteria). The aim is to provide investors, stakeholders and the public with comprehensive information on the sustainability performance of companies.

The original development of the European Sustainability Reporting Standards (ESRS) presented companies – especially small and medium-sized enterprises (SMEs) – with major challenges due to the comprehensive ESG reporting obligations. The EU Commission has now made proposals to simplify sustainability reporting obligations with the first omnibus package, which, in addition to the CSRD, also includes the EU taxonomy and the CSDDD (Corporate Sustainability Due Diligence Directive). This is primarily intended to reduce administrative hurdles and facilitate implementation for companies.

In the following, we take a detailed look at the CSRD Omnibus, its most important changes and the impact on affected companies.

What is the CSRD Omnibus?

The EU Commission recognized that the original CSRD requirements placed a heavy burden on smaller and medium-sized companies in particular. Against this background, the omnibus proposal was developed as part of the EU Competitive Compass Initiative. The CSRD Omnibus contains two specific proposals:

Sustainability Reporting Simplification Proposal: This proposal reduces the scope of CSRD reporting obligations: Companies with less than 1000 employees are exempt, 25% of the reporting data is dropped, sector-specific standards are removed and the planned switch to “Reasonable Assurance” is dropped.
“Stop-the-Clock” proposal: Companies that already have to report for 2024 are not affected by this. All other companies with a reporting obligation are to be granted a deferral of 2 years and will not have to report until 2028 instead of the 2026 financial year.

Concrete proposals of the CSRD Omnibus

The EU Commission has proposed the following amendments to the CSRD and ESRS:

The number of companies affected has been reduced: The threshold for the reporting obligation has been raised from 250 employees to companies with more than 1000 employees. This means that only companies with more than 1,000 employees AND either a balance sheet total of at least €25 million OR a turnover of more than €50 million are now subject to CSRD reporting requirements. Whether a company is listed on the stock exchange or not is irrelevant.
The reporting obligations will be simplified: reducing the required data points by 25% will reduce the workload for companies. Qualitative information in particular is to be reduced in order to focus more on quantitative information.
Timetable for implementation postponed by 2 years: Companies that are above the new thresholds and would originally have been required to report in 2026 for the 2025 financial year will receive a two-year deadline extension and will have to report for the first time in 2028 for the 2027 financial year.
Sector-specific standards will be deleted: There will be no additional industry-specific requirements and disclosure obligations.
Value chain: The reporting obligations for suppliers in the value chain will be reduced to a new voluntary reporting standard (VSME) in order to minimize the pressure to pass on data (keyword: Value Chan Cap). These measures are intended to prevent large companies from passing on reporting obligations to smaller companies in their value chain unfiltered, which would burden them with excessive data collection requirements.
Audit of CSRD reports remains with “limited assurance”: The requirements for the CSRD audit have been adjusted. The originally planned introduction of a “Reasonable Assurance” obligation has been removed, meaning that companies still only require a “Limited Assurance”.

What does NOT change with the CSRD Omnibus proposal?

The double materiality analysis remains unaffected by the adjustments and continues to be a central component of the CSRD. We recommend using our DWA Excel template or the Materiality Master software to carry out the materiality analysis efficiently.

Further omnibus proposals on the EU taxonomy and CSDDD

The omnibus proposal to simplify reporting and due diligence obligations contains proposals for the CSRD as well as adjustments to the EU taxonomy and the CSDDD.

EU taxonomy

New thresholds: Only companies with more than 1000 employees and over € 450 million turnover must comply with full EU taxonomy reporting.
Materiality threshold: Companies can omit taxonomy reporting on activities if these activities account for less than 10% of total revenue, CapEx or OpEx
Voluntary reporting simplified: companies with more than 1,000 employees but less than € 450 million in turnover (at least € 50 million) can opt for a simpler reporting system (“opt-in” approach).
Revision of the DNSH criteria: The rules for the “Do No Significant Harm” (DNSH) principle will be revised, starting with the environmental pollution criteria (“Appendix C”).
Operating expenses (OpEx): Companies only have to disclose operating expenses (OpEx) if at least 25% of their total turnover comes from taxonomy-eligible activities.
Simplified reporting formats: Adjustments to the taxonomy, climate and environmental reporting requirements reduce the reporting effort by up to 70%.

Corporate Sustainability Due Diligence Directive (CSDDD)

Start of implementation postponed by one year: The first mandatory application will not take place until 2028 (not 2027), and there will only be two waves instead of three.
The scope of responsibility is restricted: The due diligence obligations now only apply to direct business partners (Tier 1) in the upstream and downstream value chain. Indirect partners only have to be checked if there are concrete indications of violations.
Harmonized liability no longer applies: EU-wide civil liability will be abolished and national regulations will apply instead.
Fines no longer linked to turnover: The 5% limit of global turnover for fines is no longer applicable. The amount is now at the discretion of the member states.
“SME Shield” for smaller companies: Companies with fewer than 500 employees only have to meet the reduced VSME reporting standards.
No obligation to terminate business relationships: Companies no longer have to terminate business relationships, but can take alternative measures such as suspension.
Limitation of the stakeholder definition: Only employees, their representatives and directly affected persons/communities are now considered stakeholders.
Reviews only every 5 years: The obligation to carry out an annual review has been abolished; companies now only have to assess their due diligence obligations every five years.
Earlier publication of guidelines: The general EU guidelines on the implementation of the CSDDD will already be published in July 2026 (six months earlier than planned), while the detailed sector-specific guidelines will remain unchanged between January and July 2027.

These adjustments are intended to reduce the administrative burden and ensure the competitiveness of European companies without jeopardizing the EU’s sustainability goals.

When will the CSRD Omnibus proposals come into force?

The CSRD omnibus proposals will be implemented in several stages. Here is the timeline with the most important dates:

November 2024: EU Commission President von der Leyen announces the omnibus legislative package to reduce reporting obligations.
January 2025The EU publishes the “Competitiveness Compass”, which confirms the goal of simplification.
February 2025The European Commission officially presents the first “Simplification Omnibus” package.
2025 – 2026The proposal is being negotiated in the EU Parliament and the Council.
2025 – 2026 (planned): Expected adoption and entry into force of the new rules including transposition into national laws.
January 2027Extended deadlines for large companies (2nd reporting wave) come into force.
July 2028First mandatory application of the CSDDD requirements for large companies.

Important note

The EU Commission's omnibus amendments are proposals. These proposals must be consulted on and first adopted by the EU Parliament and the European Council and converted into a directive. The ESRS must then be adapted by means of a delegated act and transposed into the national law of the EU member states.

What impact does this have on CSRD implementation in Germany?

The CSRD has not yet been implemented in Germany. Affected companies must therefore continue to comply with the previously applicable Non-Financial Reporting Directive (NFRD), which has been applied in Germany since 2017 with the CSR Directive Implementation Act. Under the NFRD, only capital market-oriented companies with more than 500 employees are obliged to report on sustainability.

It is unlikely that the new government will transpose the current EU Directive on CSRD into national law after the 2025 general election. It is more likely that the German government will wait for the updated directive or the new delegated act and then transpose it into national law.

This means that the NFRD will remain in force for the time being and then all companies with over 1,000 employees AND either >€25 million in total assets OR >€50 million in turnover report in accordance with the “new” ESRS. All other companies can voluntarily apply the simplified ESRS VSME standard.

What is the significance of the CSRD Omnibus for companies?

The changes brought about by the CSRD Omnibus have a significant impact on companies in Germany and the EU. While some simplifications are welcomed, companies still need to prepare strategically for the new requirements.

Positive effects of the CSRD Omnibus

Less bureaucracy for SMEs: Companies with fewer than 1000 employees may be exempt from the reporting obligation, and the reduction in data points by 25 % reduces the data collection effort.
More time for implementation: The deadlines for sustainability reporting will be extended by two years, giving companies more scope to implement new processes.
Lower costs for external audits: The requirement for “reasonable assurance” no longer applies, meaning that companies can continue to work with less costly audit procedures or companies reporting voluntarily are not subject to an audit requirement.
Less burden from the value chain: Limiting the trickle-down effect prevents smaller suppliers from being unnecessarily overloaded with reporting requirements.

Challenges posed by the CSRD Omnibus for companies

Unclear national implementation: Germany has not yet transposed the CSRD implementation into national law. It also remains to be seen whether and by when the CSRD omnibus proposal will be implemented at both EU and local level. Companies must therefore keep a close eye on which national regulations are introduced.
Sustainability strategies still required: Even if the reporting obligation no longer applies to some companies, some investors, customers and other stakeholders still expect clear ESG data.
Criticism from stakeholders: Some companies could come under pressure to voluntarily disclose sustainability-related data in order to maintain transparency and credibility.
Lack of comparability of reports: Voluntary reporting for some companies could lead to a lack of comparability between companies of different sizes.
Delaying the transformation: Sustainability associations and NGOs criticize that the extended deadlines could lead to companies implementing necessary ESG measures more slowly.

What companies should do now

Despite the easing and postponement of CSRD implementation, companies should make good use of the time to prepare for future requirements and optimize their sustainability strategies.

Companies should implement the following “𝙉𝙤 𝙍𝙚𝙜𝙧𝙚𝙩 𝙈𝙤𝙫𝙚𝙨” now – especially if CSRD implementation has already begun:

Clarify responsibilities: Who takes on the key roles in sustainability? Responsibilities and resources should be defined now.
Perform or complete a double materiality analysis: The DWA is at the heart of CSRD – and is a strategic tool regardless of regulatory changes. It helps companies to sustainably assess risks and opportunities and make well-founded decisions.
Define a sustainability strategy: A clear sustainability strategy provides orientation and prioritization. Based on the results of the double materiality analysis, concrete goals, measures and KPIs should now be defined. The following applies: think long-term, plan measurably and anchor internally and externally. The Materiality Model Canvas can also be helpful here.
Create a voluntary and simplified VSME report: EFRAG has published a voluntary, simplified standard (ESRS VSME) that enables companies to report in a pragmatic way – ideal for presenting sustainability ambitions to stakeholders.
Putting sustainability goals into practice: The task now is to consistently implement the defined measures in the prioritized topic areas. Transparency, clear milestones and continuous monitoring of success are crucial to firmly anchoring sustainability in the company.

Companies should use their resources to implement meaningful measures and make targeted use of a lean sustainability report as a progress measurement and communication tool.

Conclusion on the CSRD Omnibus

The CSRD Omnibus brings significant relief for companies: Extended deadlines, reduced reporting obligations and relief for smaller companies reduce the bureaucratic burden. At the same time, sustainable transformation remains a key challenge, as investors, customers and regulatory authorities continue to expect transparency.

Companies should use the time gained to optimize their ESG strategies, make processes more efficient and prepare for upcoming requirements at an early stage. In the long term, sustainable business practices will not only pay off in regulatory terms, but also in terms of the market economy.