Omnibus Regulation: Simplification of ESG reporting

On February 26, 2025, the European Commission presented the long-awaited draft of the Omnibus Regulation, which provides for far-reaching changes to corporate sustainability reporting. The aim is to reduce the administrative burdenand strengthen the competitiveness of European companies. The regulation particularly affects the CSRD, CSDDD and EU taxonomy. Here is an overview of the most important changes and their impact on companies:

Amendments to the CSRD: raising the thresholds

In future, the Corporate Sustainability Reporting Directive (CSRD) will only apply to companies with more than 1,000 employees. In addition, one of the following criteria must be met:

• Annual sales of more than 50 million euros
• Balance sheet total of more than 25 million euros

This adjustment would reduce the group of companies subject to reporting requirements by around 80%.

Simplification of reporting

The European Sustainability Reporting Standards (ESRS) are to be revised. The plan is to significantly reduce the number of data points to be reported, prioritizing quantitative information and allowing more voluntary disclosures .

Postponement of the reporting obligation

A deferral of two years is provided for companies that would have been required to report from 2026 or 2027 . Companies with a reporting obligation would therefore have to report for the first time in 2028 for the 2027 financial year.

Facilitation for SMEs

Small and medium-sized enterprises (SMEs) are to be relieved. The EU recommends the use of the VSME standard (Voluntary Standard for SMEs) in order to fulfill requests from large companies efficiently and uniformly.

Changes to the audit

In future, the sustainability reporting will continue to be audited with limited assurance only. An audit with reasonable assurance is to be omitted.

Effects on companies

Although these changes could exempt many companies from reporting requirements, sustainability remains a key competitive factor. Rising CO₂ prices, ESG requirements from investors and new funding programs underline the importance of sustainable business models.

Adjustments to the CSDDD and EU taxonomy

In addition to the CSRD amendments, the Omnibus Regulation also provides for adjustments to the CSDDD, EU Taxonomy and CBAM:

Corporate Sustainability Due Diligence Directive (CSDDD):

• Due diligence obligations are limited to direct business partners.
• Inspection intervals are extended from one to five years.

EU Taxonomy Regulation:

• Conversion to a voluntary system.
• Reporting obligation only for companies with more than 1,000 employees and net sales of more than EUR 450 million.

CBAM (Carbon Border Adjustment Mechanism):

• The existing reporting obligations remain in place for larger importers, but no additional or more detailed proof of emissions is planned.
• Small importers, especially SMEs and individuals, who only import small quantities of CBAM goods are exempt from the obligations.
• The reporting obligation is to be simplified for importers who continue to fall under the CBAM.

The legislative proposals will now be submitted to the European Parliament and the Council for examination and adoption. The amendments to the CSRD, CSDDD and CBAM will enter into force as soon as an agreement has been reached and the regulation has been published in the Official Journal of the EU. The Commission is calling for prioritized treatment, as the proposals address key concerns of companies.

Recommendation: Act now instead of waiting

Even without a legal obligation, standardized ESG reporting can offer strategic advantages :

1. Strengthening trust among stakeholders
2. Improving adaptability to future regulations
3. Potential competitive advantages as a "preferred supplier"

The VSME standard offers a pragmatic solution here, especially for companies that are close to the thresholds or work with customers that are subject to reporting requirements. It can serve as a "protective shield" against repeated data requests from large customers and investors.

Sustainability as an opportunity

Companies should see the Omnibus Regulation as an opportunity to rethink and optimize their sustainability strategies. Investing in ESG strategies can pay off in terms of cost savings, new revenue streams and long-term resilience. An early focus on transparency and sustainability ensures strategic advantages in a changing market environment.

Planted supports you with the implementation

Planted helps companies to efficiently meet the requirements of sustainability reporting. With our combination of expert advice and powerful software, we offer a practical solution for a legally compliant, strategically advantageous ESG strategy.

Get in touch now and receive a free demo of our ESG software.