On 26 February 2025 the European Commission published the omnibus proposal, which includes proposals to amend certain aspects of the CSRD, the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Taxonomy. The omnibus proposal has now been submitted to the European Parliament and the Council for their consideration and approval.
The omnibus proposal followed the publication of a Competitiveness Compass by the European Commission in January 2025. In this Compass the Commission outlines, among other things, five enablers for competitiveness. One of these enablers is ‘simplification,’ which aims to reduce regulatory and administrative burdens.
For the simplification of the CSRD, the Commission proposes the following:
Mandatory reporting only for undertakings with >1,000 employees:
Only undertakings with >1,000 employees with a turnover >€50 million and/or a total balance sheet >€25 million will be required to report. This means that only a limited number of large undertakings are required to report, and that publicly listed SMEs are no longer covered by the directive. The proposal represents an 80% reduction in reporting obligations.
Voluntary reporting for other undertakings:
Undertakings that are not required to report can still do so under a voluntary standard, which will be based on the VSME.
VSME limitation of information request in the supply chain:
The VSME will serve as the 'limit' for undertakings that are required to report under the CSRD. Reporting companies are not allowed to request more information from non-reporting supply chain partners than the limit set by the VSME.
No sector-specific reporting standards:
The Commission proposes not to develop any sector-specific reporting standards.
No transition to mandatory reasonable assurance:
The possibility of moving from a requirement for limited assurance to a requirement for reasonable assurance would be removed.
Opt-in regime for taxonomy reporting:
The Commission introduces an "opt-in" regime for large undertakings with >1,000 employees and a turnover of ≤€450 million. These undertakings will only need to report on their turnover and CapEx KPIs (sustainability of turnover and capital expenses) if they claim that their activities are fully or partially aligned with the EU Taxonomy. They may also choose to report their OpEx KPIs (sustainability of operational expenses). If they do not claim such alignment, they will not be required to report on this.
Revision of the first set of ESRS:
The Commission proposes a revision of the first set of ESRS by, among other things, reducing the number of mandatory data points.
Postponement of reporting for the second and third wave:
The reporting obligation will be postponed by two years for undertakings that are required to report in 2026 (large undertakings) and 2027 (listed SMEs).
More information:
