Omnibus I CSRD & CSDDD

In February 2025, the European Commission put forward an ambitious Omnibus package designed to simplify key pieces of sustainability legislation, in particular the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), together with related rules like the EU Taxonomy Regulation. The initiative formed part of the wider Competitiveness Compass, the Commission’s effort to reduce complexity and regulatory burden on businesses operating in Europe while still promoting sustainable development and transparency. 

What exactly is this package and why was it needed? How did it move through the legislative process? What changes are made to the CSRD and CSDDD, and what lies ahead for EU Member States and the broader European sustainability agenda?

What Is the Omnibus Package?

The Omnibus Package aims to simplify and streamline the sustainability reporting and due diligence obligations for businesses as set out in the CSRD and CSDDD, respectively. The package included:

• A substantive directive proposing amendments to the content, scope, thresholds, and obligations under CSRD and CSDDD; and
• A “Stop-the-clock” directive proposing a delay in compliance deadlines for both CSRD and CSDDD. 

Why the Omnibus Package Came Into Effect

The Commission’s motivation for the Omnibus package stemmed from several intertwined factors:

• Implementation pressure: After the CSRD was adopted and began its phased roll-out, many companies raised concerns about the administrative complexity, volume of required disclosures, and preparation time needed to meet full compliance.
• Business competitiveness: European businesses faced increasing pressure from global competitors. Regulators argued that without some relief and simplification, sustainability reporting requirements risked discouraging investment, stifling growth, or pushing companies to operate outside the EU.
• Political momentum: EU leaders, including in the European Council, urged swift action on simplification, reflecting both economic concerns and political shifts within the European Parliament following the 2024 EU elections.

Timeline & Legislative Milestones

The Omnibus process moved quickly compared to many EU initiatives:

• 26 February 2025: The Commission formally presents the Omnibus proposals to amend CSRD, CSDDD, and related rules.
• March–April 2025: The European Parliament and Council advance the “Stop-the-clock” directive as part of the Omnibus. This directive was adopted mid-April, delaying key compliance timelines. For CSRD this means that companies originally due to start reporting in 2026 and 2027, are granted a postponement of 2 years. They will start reporting in 2028 (covering the financial year of 2027). CSDDD requirements are delayed by 1 year for in-scope companies.
• July 2025: The Commission adopts the “ESRS quick fix” for companies already reporting in line with CSRD. To streamline reporting expectations for all companies, phase-in requirements of ESRS are extended in line with the timelines of the “Stop-the-clock” directive.
• Mid December: After negotiations, the Council and Parliament came to an agreement on key changes of the CSRD and CSDDD. These included:
  • CSRD
    • Scope reduced to companies with more than 1,000 employees and €450 million in net turnover
    • Companies with fewer than 1,000 employees will not be required to provide sustainability information to larger companies beyond what is included in the VSME
    • European Sustainability Reporting Standards (ESRS) will be revised, with a significant reduction in reporting requirements (see link)

• • CSDDD
    • Scope reduced to companies with more than 5,000 employees and €1.5 billion in revenue
    • Removal of the obligation to prepare climate transition plans
    • Elimination of the proposed EU-wide civil liability regime
    • Maximum penalties lowered to 3 percent of global turnover
    • Entry into force delayed until July 2029 

• Early 2026: Following European Parliament’s endorsement in December, the deal entered its final legal review. The full text is expected to be published in the Official Journal in early 2026.

Next Steps: National Transposition and EU Follow-Up

With the final Omnibus text expected to be published in the Official Journal in 2026, the legal clock for implementation will begin ticking. Key next steps include:

Member States Transposition

EU countries will have approximately 12 months from publication to transpose the directive into national law. This requires legislative adjustments at the national level to reflect the new thresholds, timelines, and reporting requirements agreed at the EU-level. 

Review and Delegated Acts

The Commission must adopt further delegated acts and guidance, especially on the simplified ESRS. The revised ESRS are expected to follow by summer 2026 at the latest.

Concluding Thoughts: A Turning Point for EU Sustainability Regulation

The Omnibus process reshaped the landscape of corporate sustainability reporting and due diligence within the European Union. What began as a simplification exercise quickly evolved into a substantive reform of sustainability legislation. The end-result reflects the complex interplay of political, economic, and social priorities at the EU-level.

For businesses and governments alike, the task now is to translate these new rules into effective practice without losing sight of the broader goals of sustainability, human rights protection, and market transparency that motivated the CSRD and CSDDD in the first place.