EU Omnibus Proposal
The EU Commission released the Omnibus package suggesting changes to CSRD, CSDDD and EU Taxonomy legislations 26 February 2025. The proposal aims to simplify the sustainability reporting and mostly suggest changes to the scope of the legislation.
The impact on CSRD reporting
The main changes introduced include limiting the scope of CSRD reporting to the companies currently reporting and to large companies with more than 1000 employees and postponing the reporting requirements for companies currently in the scope of reporting from FY2025 and FY 2026 by two years.
The proposal also aims to limit the reporting burden on smaller companies in the value chain of large companies by encouraging value chain companies to report according to the voluntary standards for small and medium sized companies, the VSME.
The impact on EU Taxonomy
Regarding EU Taxonomy, the proposal suggest that the scope of EU Taxonomy will be aligned with the scope of CSDDD, meaning that EU Taxonomy reporting would be mandatory for companies with more than 1000 employees and a turnover above 450 mill euro, and kept voluntary for other large companies.
However, the proposal also suggests simplification of the reporting templates and introduces a financial materiality threshold for Taxonomy reporting. The proposal also suggests simplification to the DNSH criteria for pollution prevention and control. Finally, the main KPI for banks, the green asset ratio (GAR) will be adjusted so that GAR exposures outside the suggested future scope of CSRD can be excluded.
The Impact on CSDDD
And lastly, the proposal suggests simplifications to the CSDDD by focusing due diligence on the direct, tier 1, value chain and reducing the frequency of periodic assessments and monitoring of the value chain from annually to 5 years. The information that can be requested from SMEs will also be limited.
In addition, the EU civil liability conditions are removed. And finally, the application of the sustainability due diligence requirements are postponed by one year (26 July 2028), while advancing the adoption of guidelines by one year (July 2026).
What does all this mean for companies?
First of all, the changes suggested for the scope of CSRD are, for now, proposals and will go through the legislative process of the EU Council and EU Parliament. The EU Commission aims for a fast-tracking of the process, but likely this will still take a few months.
As CSRD is implemented in most EU countries, the current scope is still valid. We are monitoring the development closely, and will inform about any changes to the current timelines.
Regarding the simplifications to the EU Taxonomy, the draft amending regulation describing these is open for public consultation until 26 March 2025. The aim is that the simplifications to the EU Taxonomy will apply from 1 January 2026.
