Date last updated: 07.03.2025 Please note that this is a developing story and will be updated regularly.
Major Changes to Sustainability Reporting Regulations in the EU
Ever since EU Commission President Ursula von der Leyen announced a draft proposal to simplify European sustainability regulations, business leaders and sustainability experts have been waiting to learn more on what this would mean for their company. On February 26th, the EU Commission proposed the new Omnibus package as part of the broader EU Competitive Compass initiative, to better align business needs with sustainability objectives under the Green Deal.
The legislative package is aimed at simplifying EU sustainability regulations:
Corporate Sustainability Reporting Directive (CSRD),
EU Taxonomy Regulation,
Corporate Sustainability Due Diligence Directive (CSDDD),
Carbon Border Adjustment Mechanism (CBAM)
The legislative package is still moving through the EU legislative bodies and will likely undergo further changes. And while the details are still being debated, the possible changes to the status quo and implications for companies could be massive.
Key Potential Changes to the CSRD
New Reporting Thresholds
New reporting thresholds under the CSRD would be the following: Wave 1: Companies which meet the threshold of >1000 employees (reporting from FY24) continue reporting under the CSRD.
Wave 2 and 3:
The CSRD now applies only to companies with the following:
>1000 employees AND a turnover of >50 million EUR OR a balance sheet total >25 million EUR
Reporting Deadlines Delayed
Wave 1 companies that have already begun their reporting under the CSRD will continue to do so. But for companies in Wave 2 and 3, the EU Commission proposes delaying the reporting deadline by 2 years. 2028 would replace the 2026 reporting deadline for companies in the second reporting wave.
Simplified CSRD Reporting Requirements
Sector-specific reporting standards would be removed
Approximately 25% less data points to report
Possible Voluntary Reporting Option for SMEs under the CSRD
While a mandatory report would be off the table, the EU Commission has introduced a simplified voluntary reporting standard (VSME) for small and medium enterprises no longer included in the CSRD.
Key Potential Changes to the EU Taxonomy
EU Taxonomy would be largely voluntary
Reporting will be optional for companies with more than 1,000 employees and less than €450 million euro turnover.
Reduction in Data Points
According to the current status of the Omnibus package, the number of data points that will need to be reported in the future would be reduced by approximately 70%.
New Materiality Threshold
Companies with <10% eligible activities are not required to disclose their EU Taxonomy alignment.
Current Status of the EU Omnibus
To be clear, none of these changes have yet been enacted into law and all may be subject to further changes. The legislative process may take time; months or even years. However, the EU Commission has asked the EU Parliament and EU Council to prioritize the proposed Omnibus.
Which Stage is the Omnibus Legislation at?
✔ Proposal by the EU Commission. (Feb. 26th)
⚪ EU Parliament Review (possible amendments to proposal)
⚪ EU Council with Member State Representatives (possible amendments to proposal)
⚪ If amendments proposed, 2nd and/or 3rd Reading and Review
⚪ Final Vote and Adoption (if both Parliament and Council agree)
⚪ If adopted, Implementation into National Law
What does the EU Omnibus mean for my company?
At this stage, it cannot be predicted with certainty what will happen. For many companies , the question of whether they should stay on course to report or to let it be for now is crucial, but difficult to answer. Considering the current uncertainty, companies will need to take a wide variety of variables into account when deciding on next steps.
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