The much-awaited Omnibus legislation simplyfying the CSRD, the CSDD and the EU Taxonomy was finally announced yesterday by the European Commission. As expected through the leaks over the weekend, there has been a shift as regards excessive regulatory burdens.
In effect, the Omnibus package provides the following:
- A proposal for a Directive amending the CSRD and the CSDDD;
- A proposal which postpones the application of all reporting requirements in the CSRD for companies that are due to report in 2026 and 2027 (so-called wave 2 and 3 companies) and which postpones the transposition deadline and the first wave of application of the CSDDD by one year to 2028.
- A draft Delegated act amending the Taxonomy Disclosures and the Taxonomy Climate and Environmental Delegated Acts subject to public consultation.
- A proposal for a Regulation amending the Carbon Border Adjustment Mechanism Regulation
- A proposal for a Regulation amending the InvestEu Regulation
How companies in the EU will benefit
The Sustainability Omnibus package is expected to deliver €6.3 billion in annual savings by cutting administrative burdens. Key benefits include:
- Reduced reporting scope: CSRD obligations now apply only to large companies with over 1,000 employees and either €50 million turnover or €25 million in assets, cutting compliance costs for SMEs.
- Protection for SMEs: Introduction of voluntary sustainability reporting standards for SMEs, shielding them from excessive data requests by larger companies.
- Simplified Due Diligence: Reduced reporting frequency, harmonization across EU member states, and limited information requests for SMEs in large company supply chains.
- Easier Green Investment: The InvestEU Regulation changes are expected to mobilize €50 billion in additional public and private investments.
- Less Bureaucracy in CBAM: A 50-ton threshold will exempt 90% of small importers, while maintaining oversight on 99% of emissions.
- Revised Taxonomy Reporting:
- Reduction of data points by 70%.
- Introduction of materiality thresholds for reporting on eligible activities.
- Streamlining of ‘Do No Significant Harm’ (DNSH) criteria to ease compliance.
How to navigate the changes
Despite the developments, the question remains for companies, small and bigger ones: how to navigate the latest changes. For a start, this process could be lengthy until it becomes a final piece of legislation. This political trajectory has to go through the European Parliament first – and many provisions might change. Our advice at Verimpact is to stay the course with your CSRD and ESG implementation – despite all changes, you need to build sustainability data systems and enhance your ESG integration. The recent developments by no means equal abolishment of sustainability nor do they mean that investors, shareholders, banks and regulators will not still be asking for disclosures and annual reports. Invest in people and processes for long-term performance. If you need more specialized guidance, please reach out to our team