What businesses need to know about CSRD and CSDDD Omnibus changes

An overview of the Omnibus update

On 26th February, the European Commission published the official Omnibus Regulation Proposal, following the announcement from the Commission's president, Ursula von der Leyen’s, in November 2024. The proposal aims to simplify and reduce the burden imposed by the EU’s latest corporate sustainability regulations, namely the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence (CSDDD), and EU Taxonomy. 

Businesses previously covered by these regulations will be affected by the changes proposed in the Omnibus package. While the proposal must still go through the European legislative process and may evolve from its original version, it is essential for organisations to stay informed about these changes to prepare for their potential implementation. 

What are the key changes in CSRD and CSDDD?

The Omnibus proposal is a package that consists of two parts:

1. “Stop-the-clock" proposal:

This document introduces amendments to the CSRD and CSDDD, primarily to postpone their implementation deadlines. The “stop-the-clock” proposal was fast-tracked and received approval from the European Parliament on April 3rd. To become EU law, it still requires approval from the European Council. This is highly likely, as the Council has already expressed support for the proposal and aims to hold a vote by June 2025 at the latest.

 CSRD: 

• First wave: Companies reporting in 2025 for FY 2024 remain unaffected. 
• Second wave: Reporting for FY 2025, originally scheduled for 2026, is now delayed to 2028 (reporting for FY 2027). 
• Third wave: Reporting for FY 2026, originally set for 2027, is now delayed to 2029 (reporting for FY 2028).

 

CSDDD:

• Transposition timeline: The deadline for transposing the directive into Member States' national law has been extended from July 2026 to July 2027. 
• Due diligence requirements: The first group of large companies will now be required to comply from 2028, representing a one-year delay.

 

2. The sustainability reporting simplification proposal:

The table below highlights the changes proposed for CSRD and CSDDD.

CSRD

Topic	Change from Omnibus Proposal
Scope	Threshold increased to companies with 1.000+ employees and either 50M+ EUR net turnover or 25M+ EUR balance sheet.
The Value Chain cap	Reporting companies mandate to seek information in their value chain is now limited given voluntary standards applicable to stakeholders in the value chain beyond Tier 1.
ESRS Review	25% of data points data points. Prioritisation of quantitative over qualitative (narrative) datapoints.
Sector-specific standards	Removed. This would halt the working groups developing sector-specific standards.
Assurance	Limited assurance remained while reasonable assurance has been removed.
LSMEs	Listed Small to Medium-sized Enterprises (LSMES) can now report voluntarily again the Voluntary Reporting Standards for SMEs (VSME), like other SMEs.

CSDDD

Topic	Change from Omnibus Proposal
Value Chain Scope	The scope of due diligence measures has been limited to the company, its subsidiaries and direct business partners operations.
Monitoring	Frequency for monitoring due diligence measures reduced to every 5 years.
Transition Plan	No longer requires transition plans to be put into effect, but rather mandating companies to adopt a transition plan with implementing actions.
Stakeholder Definition	New definition of stakeholder: company's employees, business partners, union representatives, individuals and communities directly impacted.
Fines & Penalties	Removes reference to net turnover proportionality for fines, as well as civil liability. Leaves it to Member States to define it.

The right opportunity for businesses to reflect on their sustainability journey

While this may seem like a time to take a step back, it is essential for the business to be positioned in the right place at the right time. Business leaders can use this momentum as an opportunity to assess progress by considering these key questions: 

• Are we within the scope of the new requirements? 
• What data do we need to collect and disclose? 
• How do we assess and manage risks in our supply chain? 
• What internal systems need to be updated to meet compliance? 
• How can we turn this into a business opportunity rather than just a compliance exercise? 
• What frameworks or standards should we align with to ensure credibility in our reporting? 
• What are the key sustainability risks and opportunities for our industry? 
• How do we track progress and ensure continuous improvement in our sustainability practices? 

 

Speak with our team to reflect on your sustainability ambitions and shape a clear path ahead.

Why should businesses still move forward with sustainability reporting? 

As sustainability regulations evolve, businesses have strong incentives to remain proactive. Sustainability reporting is more than compliance—it is a key driver of building a more robust and resilient business with reduced risk exposure. Delaying action could mean falling behind as regulatory expectations continue to rise. Taking decisive action now enables businesses to meet increasing stakeholder expectations, secure a competitive advantage, and unlock sustained value over the long term.

Key considerations for moving forward

• Regulatory uncertainty and continued obligations 
  The extent to which the Omnibus Proposal will alter ESRS requirements remains unclear, but many obligations will be maintained. The “stop-the-clock” proposal may delay reporting timelines, but it does not eliminate reporting requirements altogether. Businesses that pause their efforts risk falling behind when compliance deadlines return. 
• Legislative process may alter outcomes 
  The proposal is still subject to amendments by the European Council and Parliament. Until finalised, the extent of changes remains uncertain. Companies that continue preparations will be better positioned to adapt quickly to any final adjustments. 
• Nature-related risks have not disappeared 
  Regulations like CSRD exist to address real and growing nature-related risks—physical, transition, and systemic. Businesses remain exposed to these risks regardless of regulatory shifts. Maintaining a proactive approach to nature and sustainability is essential for long-term resilience and risk mitigation. 
• Market expectations continue to rise 
  Despite the Omnibus pushback, stakeholder demand for transparency, traceability, and sustainability disclosure is accelerating. Investors, customers, and regulators continue to expect robust ESG reporting. Investing in data collection, improving supply chain traceability, and developing transition plans will remain valuable, ensuring businesses stay competitive and ahead of future regulatory shifts. 

Key takeaways

The proposed changes in the Omnibus Proposal should not discourage businesses from aligning with key regulations like CSRD and CSDDD—or from advancing broader sustainability initiatives. While the regulatory landscape is evolving, the risks of inaction remain significant, and the value of continued progress is clearly important for business operations and finance. 

Although reporting timelines may shift, business risks and opportunities remain unchanged. Companies that proactively strengthen their sustainability strategies will be better positioned to navigate future regulatory pressures and capture long-term value. 

If you are unsure about the evolving CSRD and CSDDD requirements, our team is here to help. Get in touch to ensure your business stays ahead of compliance and seize new opportunities. Speak to one of us: Lauren Weatherdon (Nature Strategy) | Sam Lacey (Nature Finance) | Grant Rudgley (Nature Finance).

 

Last updated: 11th April 2025

Category: Insight