Workiva: What Businesses Need to Know About CSRD Omnibus Proposals
Originally published on Workiva
On February 26, 2025, the European Commission launched a game-changing plan to boost EU competitiveness, simplify regulations, and fuel economic growth with its CSRD Omnibus. With over €100 billion mobilized for 'Made in EU' clean manufacturing, the initiative reinforces Europe's commitment to decarbonization.
Key legislative packages include the Clean Industrial Deal, driving energy affordability, industrial decarbonization, and sustainable procurement; Omnibus I, updating sustainability reporting and due diligence regulations; Omnibus II, expanding clean tech investment; and Omnibus III, set for Q2 2025, introducing a new 'small mid-cap' business category.
In this blog, we focus on the Omnibus I package, in particular the proposed updates related to the Corporate Sustainability Reporting Directive (CSRD). Any such proposals have a long way to go before being finalized. They would require agreement from the European Parliament and the Council of the EU to become law, and will only become binding for companies when their relevant EU member states transpose them into their national legal frameworks.
How could the Omnibus package impact the CSRD?
Possible updates to company size thresholds and sector-specific standardsThe more substantive proposal in Omnibus I ( COM(2025)81 ) introduces a new threshold for large companies with more than 1,000 employees and either a turnover above EUR 50 million or a balance sheet above EUR 25 million. Mandatory sustainability reporting requirements would apply to entities above a new threshold.
Furthermore, the proposal would (i) remove the Commission's mandate to adopt mandatory sector-specific sustainability reporting standards in the future, (ii) introduce a proportionate voluntary sustainability reporting standard for out-of-scope companies, and (iii) reduce trickle-down effects of the reporting burden but introducing a 'value chain cap' for out-of-scope companies.
Streamline the ESRS standards while maintaining double materialityOmnibus I also introduces a set of simplifications that would, among other things, aim to eliminate less critical data points, prioritize quantitative over narrative disclosures, and clarify materiality principles to ensure companies report only relevant information.
Additional time to prepare for some companiesThe more immediate proposal in Omnibus I is about introducing a two-year delay for Wave 2 and Wave 3 companies. This proposal does not introduce any other material changes and would need to be adopted first to provide legal certainty for companies who are currently due to prepare CSRD-aligned annual reports for their 2025 financial years that will be published in early 2026.
What's not changing in the CSRD Omnibus package?
It is equally important to be aware of what was not part of the Omnibus simplification package and therefore likely to remain part of any future mandate:
Integrated financial and sustainability disclosures Despite the proposed changes, the EU and other regulators expect the same level of rigor and oversight of sustainability information and continue to emphasize the integration of financial and sustainability disclosures.
The double materiality principleThe simplified ESRS standards would remain firmly rooted in the double materiality principle, with companies required to assess and disclose both financial materiality (how sustainability issues impact financial performance) and impact materiality (how business activities affect people and the environment).
Limited assurance over non-financial disclosuresThe CSRD will maintain the requirement for limited assurance over non-financial reporting in companies' annual reports, ensuring continued third-party scrutiny and verification by external auditors.
Digitally tagged and structured sustainability reporting with verificationThe requirement for digitally tagged sustainability disclosures remains unchanged. Users of sustainability information increasingly expect such information to be accessible, comparable, and machine-readable in digital formats.
No-regret actions to take now
These developments present both opportunities and challenges with potential legal complexities. To navigate this evolving landscape, we believe the following four questions will help companies currently under the CSRD mandate (Wave 1) or those preparing for future compliance (Waves 2, 3, and 4):
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