EU Omnibus Simplification Package: What You Need to Know

Tomas Novotny

Sustainability Expert

26 Feb 2025

About 5 mins

The key takeaways and implications from the EU’s proposal to streamline the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Taxonomy. Stay in the know with Sedex.

What is the EU Omnibus?

The EU Omnibus Package, officially known as the Omnibus Simplification Package, is a legislative proposal introduced by the European Commission on 26 February 2025. Its purpose is to reduce regulatory burdens for businesses by rolling back or modifying several EU sustainability and corporate reporting requirements.

What’s in scope?

As of 26 February 2025, the European Commission has introduced an “omnibus” bill proposing changes to the EU’s reporting requirements across the CSRD and CSDDD, the EU Taxonomy Regulation and the Carbon Border Adjustment Mechanism (CBAM).

What happens next?

The Omnibus proposal will now go through the EU lawmaking process, involving both the European Parliament and the EU Council for review. If approved, it will become a Directive, which will then need to be incorporated into national law by each EU country.

What are the positives takeaways?

The EU Omnibus Simplification Package shifts responsibility back to businesses to manage their supply chain risks while easing reporting and due diligence at scale, cutting administrative costs.

By exempting smaller firms, limiting supply chain checks and extending compliance deadlines, it removes barriers to investment and growth while giving companies more time to prepare. It keeps the EU at the forefront of ESG, balancing sustainability leadership with economic competitiveness.

What’s staying the same?

Double materiality principle: Companies within the scope of the CSRD are still required to report from a double materiality perspective. This means they must disclose both how sustainability issues affect their performance and how their activities impact society and the environment.

Core framework stability: While the proposal suggests adjustments to reporting thresholds and timelines, the fundamental framework of the CSRD and the EU Taxonomy remains constant. This ensures continued regulatory stability for investors and stakeholders.

What are the proposed changes?

Corporate Sustainability Reporting Directive (CSRD)

Narrower scope/higher reporting thresholds: Large companies (+1,000 employees) with turnover above €50 million or a balance sheet above €25 million.

New exemption: Companies in scope are not required to obtain data from non-CSRD companies.

Postponement by two years: Postponing the reporting requirements deadline for large companies that haven’t yet started implementing the CSRD and listed SMEs (Wave 2 and 3)

Limited assurance only: Only limited assurance is mandated, with no transition to reasonable assurance.

Fewer mandatory data points (ESRS revision): Revision of the European Sustainability Reporting Standards (ESRS), with the aim of substantially reducing the number of data points

No sector-specific standards (ESRS revision): Removing the power for the EU Commission to adopt sector-specific standards

Voluntary reporting: For the companies that will no longer be in the scope of the CSRD (companies with up to 1,000 employees), the EU Commission will create a delegated Act for a voluntary reporting standard, based on the standard for smaller businesses (SMEs/VSMEs) developed by the European Financial Reporting Advisory Group (EFRAG).

Corporate Sustainability Due Diligence Directive (CSDDD)

Postponement: The transposition deadline for EU countries to turn this into national law is postponed by one year to 26 July 2027. The first phase of due diligence requirements for large companies is delayed to 26 July 2028. Guidelines will be provided by July 2026 to help companies prepare.

Reduced value chain scope: Companies are no longer required to conduct in-depth assessments of their indirect business partners, unless they have plausible information of negative impacts.

Reduced recurrence and stakeholder mandates: Due diligence assessments will be required every five years instead of annually. Stakeholder engagement is streamlined, and the obligation to terminate business relationships as a last resort is removed.

Small business (SME) reporting requirements reduced: There are limits on the information companies can request from SMEs (≤500 employees), restricting this to the CSRD voluntary sustainability reporting standards – unless additional data is necessary.

Civil liability: EU civil liability conditions are removed, leaving national laws to define liability and representative actions by trade unions or non-governmental organisations (NGOs).

Climate transition plan: These must be aligned with CSRD standards.

Harmonisation: More due diligence provisions are harmonised to ensure a level playing field across the EU.

Exclusion of financial services: The review clause on including financial services in due diligence requirements is deleted.

EU Taxonomy Regulation

Small business (SME) exemption: Small and medium-sized enterprises (SMEs) no longer have to comply with EU Taxonomy reporting.

Voluntary reporting for some large companies: Large companies (over 1,000 employees) with turnovers below €450 million can opt for voluntary Taxonomy reporting, reducing mandatory disclosures.

Voluntary Taxonomy reporting: Companies progressing toward sustainability can voluntarily report partial Taxonomy alignment to showcase efforts and gain recognition.

Standardisation: The EU Commission will develop delegated acts to standardise reporting content and presentation.

Reporting simplification: Reporting templates will be streamlined, cutting data points by nearly 70%. Companies can skip Taxonomy assessments for non-material activities (those representing 10% or less of turnover, capital expenditure or assets).

Adjusted KPIs for financial institutions: Banks can exclude exposures to companies outside the future CSRD scope from the Green Asset Ratio (GAR) denominator.

Carbon Border Adjustment Mechanism (CBAM)

Small business (SME) exemption: Small importers, mainly SMEs and individuals, will be exempt from CBAM obligations if they import less than 50 tonnes of CBAM goods per year, equivalent to about 80 tonnes of CO2 emissions.

Compliance facilitation: For importers still under CBAM, compliance with reporting, emissions calculation, declarant authorisation and financial liability will be simplified.

Anti-abuse measures: The EU will enhance CBAM’s effectiveness by strengthening anti-abuse provisions and developing a joint anti-circumvention strategy with national authorities.

Act now to leverage these regulatory changes to your advantage. 

Contact our team today to help you navigate these evolving requirements while maintaining your competitive edge in ESG performance.

Book a free consultation to discuss how these changes can benefit your business operations and sustainability reporting approach.