The impact of the Omnibus proposal on corporate sustainability work

At the end of February, the EU Commission introduced a broad simplification package aimed at lightening the reporting requirements related to sustainability matters. The package was part of the EU’s Competitiveness Compass initiative, which aims to improve the competitiveness of EU member states. The proposed changes in this EU Omnibus package are significant and, if implemented, would result in major changes to companies' sustainability work. To make it easier to follow these developments and help companies stay up to date, we’ve summarized the contents of the proposal in this blog post.

What does the Omnibus include?

1.        Corporate Sustainability Reporting Directive (CSRD):

If the proposal is approved, the number of companies covered by the CSRD would decrease drastically – by as much as 80%. In the future, only companies with more than 1,000 employees and either a turnover exceeding 50 million euros or a balance sheet total over 25 million euros, would be required to prepare a CSRD report.

Originally, the CSRD was intended to cover all large companies as defined by the Accounting Act, as well as listed SMEs, small credit institutions, and banks. At the moment, especially companies preparing for the second wave of reporting are left with uncertainty—wondering whether they will need to prepare a report at the beginning of 2026 based on 2025 data, or not.

If the proposal were to pass in its current form, companies falling outside the scope of the CSRD could still choose to carry out voluntary sustainability reporting. In the Omnibus proposal, the voluntary sustainability report would be based on the same requirements outlined in the VSME standard developed by EFRAG. The proposal also includes a provision stating that, in the future, companies could request data from their supply chains in accordance with the VSME standard.

2.        Corporate Sustainability Due Diligence Directive (CSDDD):

The changes to the CSRD thresholds would bring the sustainability reporting directive closer to the CSDDD, which deals with corporate responsibility and supply chains.

The CSDDD has already sparked considerable discussion, and getting it passed has been challenging. Previously, resistance was caused by the legal liability imposed on companies for potential issues within their supply chains, such as human rights violations. Now, under the new proposal, the implementation of the CSDDD would be delayed by one year and simplified by reducing the assessment and due diligence requirements.

3.        Taxonomy:

If the Omnibus proposals were to be approved, the requirements related to the Taxonomy would also be eased. In the future, companies with more than 1,000 employees and a turnover below 450 million euros could report on the Taxonomy voluntarily, which would reduce the number of mandatory reports. In addition, partial Taxonomy reporting would be allowed for companies that have made progress toward sustainability goals but do not meet all the requirements. Reporting templates would be simplified by reducing the number of data points by up to 70% compared to the current level, and companies would be exempt from reporting Taxonomy-related information on activities that represent less than 10% of their business.

4.        CBAM:

Regarding the Carbon Border Adjustment Mechanism (CBAM), the Omnibus proposal seeks relief through a new annual import threshold of 50 tonnes. This would mean that small and occasional importers would be exempt from CBAM obligations, thereby reducing administrative burden. The annual threshold would correspond to an average of 80 tonnes of CO₂e emissions per importer. In the future, emission calculation and reporting requirements for companies covered by CBAM would be simplified. The proposed changes would reduce the reporting load for SMEs and make regulatory compliance easier. Even though up to 90% of companies would be exempt from reporting obligations if the proposal is passed, 99% of emissions would still remain within the scope of CBAM regulation.

How can a company prepare for the potential changes of the Omnibus proposal?

Companies may find themselves in a difficult situation: they are currently required to report based on 2025 data, with the first report due in early 2026 — but if the new EU proposal is approved, they might end up being excluded from the requirements altogether. The EU is expected to process the proposals on an accelerated timeline, but the exact schedule for decision-making is still unclear. So, what can a company do at this point?

If a company has already invested in sustainability reporting and started assessing impacts, it may still be worthwhile to continue, regardless of whether reporting remains mandatory. Even if the CSRD thresholds change and the company is no longer required to report, it can continue its sustainability efforts, for example, by publishing a voluntary sustainability report based on the VSME standard. This would allow the company to continue its sustainability work at its own, lighter and more flexible pace, while still remaining competitive, and potentially even positioning itself as a frontrunner in procurement situations.

It’s also important to remember that the employee and turnover thresholds apply at the group level, and reporting obligations also extend to non-EU companies with operations in the EU that meet the reporting thresholds. So, if a company is part of a larger group, it may still be subject to reporting requirements even if the thresholds change. Additionally, this is still just a proposal, which requires approval from both the European Parliament and the member states, so further changes, especially to company thresholds, are still possible and should be anticipated. The proposal also includes a so-called 'Stop-the-clock' provision that would delay reporting, and its approval is considered more likely. If adopted, it would postpone the reporting obligation by at least one year.

Even if your company is no longer required to report and the obligation for sustainability reporting is lifted, inquiries related to sustainability are unlikely to stop. Any available resources can be redirected, for example, to calculating the carbon footprint of your products. If your company manufactures and sells products, the freed-up working hours could be used for emissions calculations, as the demand for this type of information is unlikely to decrease even if CSRD reporting does. Many companies are already requesting this data from their supply chains, including from smaller businesses, so it's wise to be prepared for such requests in advance.

Amid all the regulations and obligations, it’s important to remember that climate change isn’t going anywhere even if legal requirements are eased. Reporting on sustainability for the sake of reporting alone is not a guarantee of real progress; genuine action is needed to drive meaningful change. Despite everything, this may be a good moment to take a closer look at your company’s sustainability and identify the most relevant areas for improvement in your operations.

Leading companies were already going beyond regulatory requirements even before the CSRD came into effect, and being a frontrunner will continue to require more than just meeting the minimum standards. That’s why a responsible company will continue its sustainability work—no matter what!