Keeping up with ESG - Omnibus Roundup

Hello reader 👋🏼

This edition read time: 6-8 minutes

Today we cover:

• Key updates at a glance

• Summary table of CSRD, CSDDD, EU Taxonomy, and CBAM changes

• Real-world impact on businesses

• What’s next in the approval process

Omnibus is here — kind of.

After months of leaks, debates, and last-minute changes, the European Commission has finally released its proposal. Less admin, fewer companies in scope, and a promise of “simplification”.

But nothing is final. Parliament and Council still need to approve it, and that could take months, and land somewhere between the old and new rules. Many companies are now stuck in regulatory limbo.

This issue breaks down what’s changing, what’s uncertain, and what’s next in the approval process — to help you navigate boardroom discussions on what to do next.

OMNIBUS SIMPLIFICATION PACKAGE

The Omnibus Simplification Package is the European Commission’s response to growing concerns about the complexity of sustainability regulations. Designed to simplify reporting requirements, it aims to reduce administrative burdens while maintaining sustainability standards.

Released on 26 February 2025, the package introduces key changes to major frameworks, including the CSRD, CSDDD, EU Taxonomy Regulation, and CBAM. By aligning reporting scopes and simplifying disclosures, it seeks to make compliance easier for companies — especially smaller ones.

INTRODUCED CHANGES

In a nutshell, The Omnibus Simplification Package postpones compliance deadlines, reduces the regulatory scope, and simplifies reporting requirements. 

Both CSRD and CSDDD deadlines have been pushed to 2028, giving companies more time to prepare. The scope of CSRD has been significantly reduced, now applying only to companies with 1,000 or more employees and either a turnover exceeding €50 million or a balance sheet total above €25 million, effectively removing around 80% of previously covered firms. Reporting requirements have also been simplified, with sector-specific standards eliminated, and companies outside the scope can voluntarily report under a simplified framework.

To further simplify compliance and align regulations, EU Taxonomy reporting obligations have been limited to the largest companies under CSRD scope, while voluntary reporting remains an option. The package also introduces a 70% reduction in data points and a financial materiality threshold to simplify disclosures.

CBAM changes primarily ease the burden on small businesses, exempting importers handling less than 50 tonnes per year while still covering 99% of emissions. Other processes, including reporting and authorisation, have also been simplified to make compliance more manageable. These adjustments aim to reduce complexity while maintaining the core objectives of sustainability regulations.

Significant changes are summarised in the table below.

WHAT DOES OMNIBUS MEAN FOR COMPANIES?

Strategically, the approach to sustainability reporting and due diligence remains unchanged, so the efforts made so far won’t be wasted.

Despite the updates, CSRD’s double materiality assessment remains unchanged, serving as a key tool for both reporting and strategic planning across all companies. For due diligence, even with less frequent requirements and a narrower scope, companies must still analyse supply chains. Engaging suppliers and collecting sustainability data now will be essential for long-term success.

If implemented effectively with input from affected stakeholders, the Omnibus could harmonise existing legislation and simplify compliance.

The Omnibus Proposal's interconnected legislations have created confusion and additional compliance burdens. At the same time, ESRS requirements have become overly complex, requiring companies to invest significant time and money just to grasp their reporting obligations. While simplification is clearly needed, it must be balanced to ensure the Green Deal’s objectives remain intact.

Non-compliance risk may rise due to policy reversals and uncertainty in the Omnibus timeline.

If the Omnibus is approved, changes will be rapid, posing a risk that companies may struggle to adapt in time. For example, according to Anna Krotova, Sustainability Lead at Picnic and author of “How to Be a Chief Sustainability Officer”, the Omnibus changes to CSRD may increase non-compliance risks for 'Wave 2' companies (set to report in 2026):

Reducing the regulatory burden on smaller companies may increase compliance efforts for larger firms.

As stated in the Omnibus Q&A, the new VSME-based standard will act as “a shield” for out-of-scope companies, restricting the information requests that CSRD- and CSDDD-covered companies can make to their value chain partners. Requests can still be made if a relevant impact is not covered by the standard. However, given the uncertainties, this provision may increase the burden on larger companies, requiring them to educate suppliers on ESG data collection, source information independently, or engage third-party agencies for data search.

Existing controversies within the Omnibus Proposal may lead to implementation difficulties and further confusion. 

For instance, Nikodemus Solitander, Associate Dean at Hanken School of Economics, warns that the Omnibus Proposal contradicts the UNGPs by limiting due diligence to direct partners instead of high-risk areas, increasing confusion among in-scope companies.

Omnibus may open the road for further changes.

Despite scepticism surrounding the proposed changes, some experts, companies, and legislators support the reforms and believe even further action is necessary. For example, Axel Voss, Member of the European Parliament for the Cologne/Bonn region, states that further simplification efforts are still necessary:

WHAT ARE THE NEXT STEPS?

The Omnibus proposal is a significant milestone, but it's only the first step. While the European Commission drafts the proposal, its fate rests with the European Parliament (requiring an absolute majority) and the Council of the EU (where 55% of member states, representing 65% of the EU population, must approve it). For now, nothing is certain - we can only wait and see how things unfold. 

In the meantime:

1. Be agile and prepare for multiple scenarios

The Omnibus Proposal is not final, and changes may happen quickly. Companies must stay flexible and prepare for multiple regulatory scenarios by focusing on core sustainability principles that support operations and strategic planning.

For instance, the double materiality concept remains intact, offering valuable insights for long-term strategy, while ESRS standards already include useful criteria to assess the maturity of sustainability practices. Similarly, key components in the EU Taxonomy, CSDDD, and CBAM provide structured ways to evaluate and improve sustainability performance. Leveraging these frameworks helps companies gain deeper insights, understand their current standing, and build a roadmap for continuous improvement — regardless of future regulatory changes.

2. Prioritise actions over reporting

Legislations mentioned in the Omnibus Proposal are ultimately about driving improvements. Aligning with EU Taxonomy helps reduce emissions, lower carbon footprints, and enhance energy and water efficiency. CBAM promotes cleaner production, while CSDDD strengthens human rights and environmental protections.

Rather than getting caught up in reporting details, focus on meaningful actions that contribute to these broader goals. At the end of the day, what you report matters more than how you report it.

3. Get Sirius

With Sirius, you no longer need to track regulatory updates — our expert team ensures the solution is always aligned with official regulations. The platform automatically collects, connects, and structures all your ESG data — both qualitative and quantitative — into a single source of truth, your Sustainability Twin. When deadlines approach, Sirius automatically gathers, organises, and formats the data from the Twin, preparing reports and cutting manual effort by 70%.

See it in action — join our live platform walkthrough or request a tailored demo to discover how industry leaders get compliance right — without the chaos.

This is it for now! Stay tuned for the next edition ✌🏽