How Will the EU Omnibus Affect CSRD Reporting Requirements?

Chris Shaw

Technical Director

Alexandra McKay

Associate Director

Pianpian Wang

Associate Director

Table of contents

• What are the key changes?
• Who does it apply to?
• What should you do in the interim?
• How will it affect supply chains?
• What should organisations do now? 
• Contact us

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The Corporate Sustainability Reporting Directive (CSRD) was set to transform corporate transparency and sustainability disclosure requirements, but the recent Omnibus Simplification Proposal signals potential changes that could impact its implementation. With potential changes to reporting thresholds, deadlines, and compliance obligations, many companies are left wondering: what happens next? Does the CSRD remain in force? Will supply chain partners still need to report under the same scrutiny? And—crucially—will companies face fines if they fail to meet existing deadlines?

In this article, we address frequently asked questions related to the EU Omnibus and CSRD and break down exactly what these proposed changes mean, who they impact, and what businesses should be doing now to stay ahead. 

What are the key changes proposed in the Omnibus package? 

The European Commission has introduced a new package of proposals, known as the Sustainability Simplification Omnibus Package, aimed at simplifying sustainability reporting requirements for businesses operating within the EU and streamlining requirements across regulations.

These proposed changes include: 

• Threshold changes: An increase in company thresholds, which reduces the number of companies required to report to the Corporate Sustainability Reporting Directive (CSRD) by approximately 80%. 
• Delay: EU Companies still within the thresholds but yet to report under the CSRD, will receive a two-year delay in their reporting obligations. 
• Reporting timelines: EU-listed companies reporting to the CSRD will see no delay in their reporting timeline. 
• Scope: Non-EU companies with sizable EU operations will remain in scope with the original deadline. 
• ESRS data points: The European Sustainability Reporting Standards (ESRS) will undergo revisions aimed at reducing the number of mandatory data points. 
• VSME Standard: The potential introduction of the Voluntary SME Reporting Standard (VSME) for businesses that are no longer included in the revised CSRD scope. 
• Materiality: The retention of the Double Materiality Principle, the requirement for in-scope companies to report on both how sustainability impacts their business and their effect on people and the environment. 

The changes are still just a proposal and are pending legislative approval, a process that may take 6-12 months or longer. This means that the current requirements under the CSRD remain in effect until further notice. The specific elements, such as the delay in CSRD timelines, could be expedited for earlier adoption.

Who the CSRD applies to under the Omnibus Proposal

How are companies impacted by the EU Omnibus changes? 

Under the Corporate Sustainability Reporting Directive (CSRD) companies are categorised into different “waves” based on when they are required to comply. Each wave represents a distinct group of entities with specific reporting obligations and timelines: 

• Wave 1 – EU listed large companies. For EU-listed large companies, there are no immediate changes to thresholds or timelines under the EU Omnibus changes. These companies should maintain their current reporting timelines. However, there may be a reduction in the number of European Sustainability Reporting Standards (ESRS) data points required for future reporting. This change could simplify compliance efforts but does not alter the fundamental reporting obligations. 
• Wave 2 – Companies due to report in FY2025. For companies scheduled to report on their financial year 2025, a two-year delay has been proposed. Despite this potential delay, businesses should continue with their planned actions to prepare for reporting. Delaying preparation efforts could leave organisations vulnerable to noncompliance if the regulatory timeline does not change as anticipated. The additional time, if confirmed, offers an opportunity to refine processes and improve the quality of the first report. 
• Wave 2 – Companies due to report in FY2025 – coming out of scope. For companies that may now fall outside the reporting scope, sustainability remains important to meet stakeholder expectations. Even if reporting obligations are relaxed, key factors such as customer and investor expectations, corporate reputation, value chain relationships, and overall business resilience still drive the need for strong ESG practices. 
• Wave 3: Small and medium-sized entities – due to report in 2027. Small and medium-sized entities that are public interest entities, issuers, or fall under specific categories (e.g., small and non-complex institutions or captive insurance undertakings) may be affected by a proposed two-year delay. As a result, these entities would begin reporting in 2029 based on data collected during 2028. 
• Wave 4: Non-EU companies – due to report in 2029. For non-EU companies, the reporting timeline remains unchanged. However, the proposed changes introduce new thresholds. The net turnover threshold for non-EU undertakings has increased from EUR 150 million to EUR 450 million. Additionally, the EU branch threshold has risen from EUR 40 million to EUR 50 million. Moreover, the requirement to report on the ultimate non-EU parent company now applies only to large subsidiary undertakings. These changes may reduce the reporting burden for some non-EU entities while still ensuring that significant operations remain accountable. 

What’s the definition of a ‘large undertaking’ (wave 2 companies)? 

The first wave covers large EU-listed undertakings, which already have to report under the Non-Financial Reporting Directive (NFRD). This remains unchanged by the Omnibus updates. The definition of a large undertaking has changed to: 

(a) more than 1,000 employees AND meets at least one financial test

(b) net turnover: above EUR 50,000,000  

(c) balance sheet: above EUR 25,000,000. 

How is the employee compliance threshold calculated?  

• Does it apply based on the size of individual EU entities, the total EU-wide headcount, or global headcount?  
• Are part-time and temporary employees counted?  
• How does this threshold apply to a parent company of a large group versus individual entities? 

The Omnibus proposal does not change the methodology for calculating employee thresholds under CSRD. Companies must consider this threshold at both the individual entity level and on a consolidated basis if they have subsidiaries. For EU entities with subsidiaries, the 1,000-employee threshold is assessed on a consolidated basis, meaning that the parent entity must aggregate its employees with those of its subsidiaries when determining compliance. 

For non-EU companies that may be required to report under Article 40A of the CSRD, the rules differ slightly. In this case, an entity must assess whether it has an EU subsidiary or branch that qualifies as a “large undertaking” (see the answer to the previous question for a definition). Additionally, non-EU companies must consider whether they generate more than €450 million in revenue from the EU. 

The calculation for the CSRD employee threshold includes full-time, part-time, temporary employees and other workers in non-standard forms of employment. 

In countries where CSRD has been transposed – are we still obligated to report based on the current rules?  

Transposition is the process by which each EU member state incorporates the requirements of an EU directive (such as the CSRD and CSDDD) into national law. During this process, member states can fully adopt the directive’s requirements, introduce stricter measures, or make adjustments to align with their existing national laws. 

Some EU member states have already transposed the current version of the CSRD. These national laws are valid and effective; therefore, to avoid penalties, companies should comply with these national regulations when preparing and issuing their CSRD reports.  

For countries that have not yet transposed the CSRD, companies should monitor the progress of transposition at the country level. Member states may choose to pause or continue the transposition process. 

How should companies apply scoping requirements (parent vs. entity level)?  

Under the Omnibus proposals, companies need to consider both parent and entity-level scoping requirements for compliance. Here are some key points for reference:  

1. Assess Reporting Obligations:  

(a) Evaluate whether each entity within the group meets the proposed new thresholds (including the employee count, net turnover, and balance sheet)  

(b) Evaluate whether the group (especially non-EU companies) meets the proposed new thresholds 

2. Consider Exemptions: Determine if any exemptions apply, such as inclusion in a consolidated report (especially for countries that have already transposed the CSRD) 

3. Factor in Data Availability: Use the existing CSRD-ESRS as a baseline to evaluate data availability, feasibility, and the timeline for compiling the information. This readiness helps prevent last-minute compliance scrambles and associated costs.  

4. Talk to Key Stakeholders: Consider the information needs of your key stakeholders when deciding the reporting approach.  

When can we expect the Omnibus proposal to enter into force? 

The regular EU legislative process may take 6-12 months to pass or reject a proposal. Most EU legislatives files are agreed at the first and second reading. However, this can vary depending on the complexity of the directive and potential disagreements between the European Parliament and the Council. Once the changes are agreed at the EU level, individual jurisdictions will need time to transpose the updates into national law. 

The Omnibus package was released in two parts. The more immediate proposal, called the ‘stop-the-clock’ proposal, focusses on the 2-year delay for Wave 2 companies and is expected to pass through Parliament and the Council more quickly than the broader package of measures. This will give European Parliament time to process the other changes. You can find the timeline for approval here.

What organisations should do in the interim for delayed reports 

If the EU Parliament and Council have not yet deliberated, does the CSRD remain suspended, or do the previous regulations still apply? 

Until the EU Parliament and Council have deliberated and reached a consensus on the Omnibus proposals (including the new thresholds and reporting timelines), the existing CSRD remains valid and effective.  If the proposal to postpone the reporting date (‘stop the clock’ omnibus proposal) is passed, the 2-year delay would become effective.  

For organisations that remain within the scope of the CSRD but have been granted a two-year extension (wave 2 and 3), how should they proceed this year? Additionally, if negotiations lead to further changes later in the year, how should they respond to ensure compliance? 

Organisations that remain in scope but have received a two-year extension should continue with their compliance efforts rather than pausing entirely. If your company is already engaged in a Double Materiality Assessment (DMA) or another significant workstream related to the CSRD, it is advisable to proceed with these initiatives.  

While some recalibration of work plans may be necessary, larger companies are generally continuing their preparations. The regulatory landscape remains uncertain, and if proposed changes are not finalised in time, organisations may still need to report under the existing timeline. Therefore, maintaining progress ensures that companies are not left unprepared should the negotiations take longer than expected. These efforts provide broader benefits beyond regulatory compliance, such as enterprise risk management. 

Will companies be subject to fines if they miss deadlines under the current Directive? 

Penalties typically apply only after the Directive has been transposed into national law. If a company pauses CSRD compliance due to the Omnibus proposals, and changes are not made to national legislation in a timely way, the company may be subject to fines according to those national laws. 

National regulators may issue non-enforcement guidance to address compliance uncertainties, and we have seen this approach applied in other regulatory contexts. However, organisations should stay informed of developments at both the EU and national levels to adapt their compliance strategies accordingly. 

What about companies operating in a country where the current CSRD regulation has not been transposed? 

Member states that have not transposed the existing CSRD regulation officially remain obliged to do so. Companies should monitor the progress of transposition at the country level as member states may choose to pause or continue the transposition process. 

How this will affect companies within the supply chain of other CSRD-obligated companies 

What data requirements will there be for supply chain partners that do not fall in scope? 

The Omnibus proposal mentions that for undertakings not subject to mandatory sustainability reporting requirements, the Commission proposes a proportionate standard for voluntary use which would be based on the Voluntary SME Reporting Standard (VSME) standard developed by EFRAG. 

The Omnibus proposal does not permit in-scope companies to require value-chain companies below the thresholds to disclose information beyond the voluntary standard, unless mutually agreed upon by the parties.  

We will closely monitor the development of the proposed voluntary standard and share updates as more information about the data requirements becomes available.  

What does best in class reporting look like, and how can we find good examples? 

A best-in-class CSRD report typically includes some key elements that ensure comprehensive and transparent sustainability reporting. Here are some considerations for your reference: 

• Understand the Reporting Requirements: Fulfil all the requirements to ensure compliance. Understanding these requirements will help identify the key data points and performance indicators that need to be included. 
• Clear Structure, Visuals and Accessible Language: Use a clear structure and visuals and accessible language to allow users to follow the content easily.  
• Comprehensive Disclosures: Cover general disclosures as well as specific ESG data. 
• Stakeholder Engagement: Engage with stakeholders and incorporate their feedback into the report. This ensures the report addresses the concerns and interests of various stakeholders. 
• Double Materiality Assessment: Conduct a double materiality assessment to identify significant sustainability impacts from both a financial and societal perspective. This is a key requirement under the CSRD and serves as a foundation for the report. 
• Data Accuracy and Verification: Ensure the accuracy of reported data and have it verified by qualified third parties. 
• Future-Oriented Goals: CSRD reports should not only show a company’s current status but also indicate future development. Setting clear, measurable sustainability goals and outlining the steps to achieve them demonstrates a company’s commitment to continuous improvement. 

What should organisations do now? 

This landscape is evolving rapidly, with key updates expected soon. Stay informed by signing up for Anthesis’ reporting newsletter to receive the latest developments and expert analysis of the first CSRD reports.