Omnibus – Navigating the shift from compliance to value creation

The key changes can be summarised as follows. 

Easing the burden of sustainability reporting 
The upcoming changes to sustainability reporting under the CSRD and EU Taxonomy aim to reduce regulatory burdens while maintaining a focus on large companies with the most significant environmental and social impact. Around 80% of companies will be removed from the CSRD's scope, ensuring that sustainability reporting obligations primarily apply to the largest businesses. 

Additionally, reporting deadlines for companies currently within the CSRD’s scope will be postponed by two years. The EU Taxonomy reporting obligations will be simplified, aligning with the scope of the CSDDD, while allowing other large companies to report voluntarily to facilitate access to sustainable finance.  

Further revisions include the introduction of a financial materiality threshold, a 70% reduction in reporting templates, and simplified “Do No Significant Harm” (DNSH) criteria related to pollution prevention. Adjustments to key financial indicators, such as the Green Asset Ratio (GAR) for banks, will also be implemented to exclude exposures linked to smaller companies outside the CSRD’s future scope. 

Streamlining due diligence (CSDDD) to strengthen responsible business practices 

The changes to sustainability due diligence regulations aim to simplify requirements, reduce compliance costs, and create a more consistent framework across the EU. Companies within the scope of these regulations will see streamlined due diligence processes, with systematic requirements focused only on direct business partners and a reduced frequency of periodic assessments—from annually to every five years—while maintaining ad hoc assessments where necessary.  

The burden on SMEs and smaller mid-cap companies will also be eased by limiting the amount of information they must provide for value chain mapping.  

Additionally, greater harmonisation of due diligence requirements will help ensure a level playing field across the EU.  

The reforms will also remove EU-specific civil liability conditions, instead allowing Member States to manage liability under their own frameworks, ensuring victims can claim full compensation while protecting companies from excessive claims.  

To provide businesses with more time to adapt, the implementation of due diligence obligations for the largest companies will be postponed by one year to 26 July 2028, while the adoption of guidelines will be brought forward to July 2026.  

Next steps 

These proposals now need to be discussed and approved by the European Parliament and the Council of the EU before becoming official laws.  The adoption of the rules to postpone the reporting requirements will likely be fast-tracked, while the remaining provisions will follow the regular legislative process. 

Recalibrate focus 

Investing in ESG initiatives remains essential for maintaining market credibility. The easing of regulations now presents an opportunity to take a stronger stance on sustainability, enhance financial stability, and ultimately gain a competitive advantage through ongoing ESG efforts. 

ESG data continues to be crucial for responding to stakeholder expectations and ensuring business resilience. While the CSRD introduced extensive reporting obligations, it is important to recognise that there are many approaches between no reporting and full CSRD compliance. 

With the reduced administrative burden, businesses can shift their focus from compliance to value creation. This begins with redefining ESG ambitions in terms of implementing tangible climate-related actions, integrating ESG into corporate strategy, developing an ESG-focused procurement approach, and establishing concrete ESG policies - just to name a few possibilities.