EU Omnibus Package
Major CSRD/ESRS
Reporting Changes

What Has Been Agreed

The primary objective of the Omnibus I package is to simplify the sustainability reporting landscape; ensuring that administrative burdens are proportionate while safeguarding the core objectives of the EU Green Deal and transparency requirements.

The package includes higher thresholds for CSRD, a complete exemption path for listed SMEs, caps on information requests to smaller value chain partners, and a postponement of many reporting obligations.

CSRD Scope: A Major Narrowing

The final agreement establishes significantly higher thresholds for mandatory
CSRD reporting. Under the revised text, companies must now have more than
1,000 employees AND net turnover exceeding €450 million to fall under CSRD requirements.

This represents a fundamental shift from the original framework's "2-out-of-3"
test and will remove many high-turnover, low-headcount businesses from mandatory reporting.

For EU companies:

• More than 1,000 employees (up from 250)
• AND net turnover exceeding EUR 450 million.
• Both criteria must be met, on a standalone or consolidated basis.

For non-EU companies:

• Net turnover exceeding EUR 450 million in the EU for two consecutive years (individually or on a consolidated basis)
• AND EU subsidiary or branch with net turnover exceeding EUR 200 million.

Timeline and Transitional Relief

The Omnibus I CSRD amendments are expected to apply from 2027, with transitional relief for de-scoped first-wave companies:

• Wave 1: Member States may exempt first-wave companies that fall out of the revised scope from reporting for FY 2025 and FY 2026.


• Listed SMEs: Listed SMEs that do not meet the revised thresholds drop out of mandatory CSRD scope. They may still receive limited sustainability data requests through the value chain, but those requests are constrained.

New Exemptions and Protections

Financial holding companies that are not involved in the management of subsidiaries are exempt from CSRD reporting obligations, unless they are significant within the group.

Additionally; large listed subsidiaries that are included in their parent’s consolidated CSRD report can now rely on the subsidiary exemption, which is a substantial change from the original directive’s approach.

Value Chain Information Caps

A major protection for smaller businesses has been introduced. Companies with fewer than 1,000 employees may decline to provide CSRD related information that exceeds the content specified in the voluntary sustainability reporting standards for SMEs.

Reporting companies must identify these "protected undertakings" and state whether information requests exceed the cap. Contractual provisions that ignore these constraints may be deemed invalid under national law.

Simplified Reporting Requirements

The Omnibus‑I deal reduces the prescriptive nature of ESRS based disclosures:

• Greater emphasis on quantitative data and streamlined narrative.


• The Commission’s power to adopt mandatory sector specific standards is removed.


• Replaced with the ability to issue non‑binding guidance instead.


• Companies may omit information that is genuinely commercially sensitive, classified, or related to intellectual property, subject to clear conditions.

CS3D (CSDDD) Changes

The Corporate Sustainability Due Diligence Directive has been substantially revised:

For EU companies:

• More than 5,000 employees (up from 1,000)
• AND worldwide net turnover exceeding EUR 1.5 billion.

For non-EU companies:

• EU turnover exceeding EUR 1.5 billion (no employee threshold).

The requirement for companies to adopt and implement a climate transition plan has been removed from CS3D. However, CSRD still requires companies to disclose whether they have a climate transition plan and, where material, to describe its content and implementation framework.

Civil Liability Framework Changes

The EU-wide civil liability framework in Article 29 is removed, deferring to member state civil liability regimes. This increases fragmentation and may encourage forum shopping; with litigation risk varying by jurisdiction.

Penalties are subject to a maximum cap of 3% of net worldwide turnover,
with the EU expected to issue guidance to support calibration across Member States.

Implementation Timeline

The Omnibus I directive will be published in the Official Journal of the EU and entered into force 20 days after publication, around March 2026. Member States must transpose the directive into national law within 12 months of entry into force, except for CS3D amendments, which must be transposed by 26 July 2028.

The Commission is expected to adopt revised European Sustainability Reporting Standards (ESRS) within six months of the amendments entering into force, aligning new standards with the updated CSRD thresholds and simplification measures.

What This Means For Businesses

Immediate Actions Required:

• Re-assess scope: All companies should immediately re-evaluate whether they fall under the revised CSRD and CS3D thresholds using the new cumulative criteria.


• Review group structure: Consider implications for subsidiary exemptions, financial holding companies, and consolidated reporting architectures.


• Monitor member state implementation: Transitional relief and liability rules require national transposition; track local implementing legislation and guidance.


• Evaluate voluntary reporting: Companies dropping below mandatory thresholds should consider whether voluntary reporting (e.g., simplified SME aligned standards) still serves strategic or ESG investor needs.

Criticisms and Concerns

The agreement has generated mixed reactions. While many businesses welcome reduced regulatory burdens, stakeholders have raised concerns about:

• Regulatory fragmentation: Removal of harmonized civil liability rules increases divergence across Member States.


• Reduced ambition: Some actors view the changes as diluting the EU's sustainability leadership and global influence.


• Data gaps: Financial institutions and investors relying on ESG data may face information shortfalls.


• Future uncertainty: Review clauses mean scope could expand again.

CONCLUSION
Fundamental Reshaping of EU ESG Landscape

The Omnibus I agreement represents a pragmatic response to business community concerns about implementation feasibility, but it fundamentally reshapes the EU's sustainability reporting landscape. The dramatic reduction in scope, from potentially hundreds of thousands of companies, to only the largest multinationals, reflects a recalibration toward competitiveness alongside sustainability goals.

For companies, the immediate priority is to reassess their status under new thresholds, and understand transitional provisions in their jurisdictions.

The EU's sustainability reporting journey continues,
but the road ahead is very different than just 12 months ago.

Next Steps For Your Organisation

As you adjust your ESG roadmap, consider these immediate actions:

• Re‑assess CSRD scope if applicable: Determine whether your group remains in scope under the new thresholds (1,000+ employees AND EUR 450M+ turnover, with narrower rules for EU and non‑EU companies).
• Map material topics: Use double materiality principles to identify which ESG disclosures remain relevant to both the standards frameworks you report under and your sustainability strategy.
• Consolidate ESG data: Build a single source of truth that connects finance, EHS, HR, and procurement systems to avoid rework across all ESG, CSRD, GRI, and SDR type requirements.
• Plan for assurance: Treat ESG & CSRD aligned disclosures as audit‑ready from the start, with clear data lineage and controls matching financial grade standards.

Related Articles

• The CS3D (CSDDD) Omnibus Changes: How the due diligence side of EU sustainability regulation evolved alongside CSRD.
• Top 10 CSRD Challenges: Where your reporting infrastructure must be strong enough to support CSRD aligned disclosure of CS3D led actions.
• The Role of AI in ESG Data Collection & Analysis: How automation can help manage supplier‑level data, risk flags, and audit‑ready due‑diligence statements.
• Using Blockchain Web3 to Anchor ESG Transparency: How blockchain anchored supplier and impact data integrate with AI to enable verifiable disclosures, eliminating greenwashing.