EU Sustainability Omnibus published

First Omnibus Package on Sustainability 

On Wednesday 26th of February, the European Commission held its weekly meeting to discuss, amongst other topics, the First Omnibus Package on Sustainability, with a particular focus on simplifying the CSRD and CSDDD, and the Second Omnibus Package on Investment Simplification. Tension was high as we awaited the outcomes of the discussion.

Since February 22nd, leaked documents leading up to the meeting have fueled rumors, interpretations, and uncertainty for companies working on the implementation of the CSRD and CSDDD.

During today’s press conference, Valdis Dombrovskis, European Commissioner for Economy and Productivity, Implementation and Simplification said: “The world is changing before our eyes with dramatic shifts in the geopolitical landscape.” The European Union needs to maintain and develop its competitive position by adapting, innovating, and competing in the world. He also highlighted that this simplification agenda is not about deregulation, but it is about achieving goals in a smarter and less burdensome way, so that companies, and especially SMEs, can focus on creating growth, jobs, innovation, and helping secure the green and digital transitions.

Following the press release, the following key amendments are proposed:

Implications for CSRD

• Stop the clock of two years: postponement of the CSRD of two years for large companies and listed SMEs (Wave 2 & 3).
• Reduced scope: the scope of companies under the CSRD has been adjusted to those large companies which have 1000 or more employees, and either €50M+ turnover, or €25M+ balance sheet.
• Reporting cap for smaller companies: companies under 1,000 employees will follow a voluntary reporting standard (VSME), limiting data requests from larger companies.
• Development of simplified ESRS: the Commission will reduce data points, clarify provisions, and improve consistency in sustainability reporting.
• Removal of sector-specific standards: the Commission will no longer adopt sector-specific reporting requirements.
• No stricter assurance standards: the option to increase assurance from limited assurance to reasonable assurance has been removed.

Implications for CSDDD

• Delay in transposition and application of one year: Member States must transpose the CSDDD into national legislation by 2027, with the first companies required to comply from 2028. Guidance documents are expected by July 2026.
• Scope of due diligence limited to direct business partners: The due diligence duty applies only to direct business partners (Tier 1, instead of Tier N), unless there is plausible information suggesting negative impacts at indirect partners. If direct business partners are SMEs (<500 employees), companies may only request information as listed in the Voluntary CSRD standard for SMEs.
• Monitoring and evaluation intervals extended: Assessments are now required every 5 years instead of annually.
• Removal of mandatory business relationship termination: The original clause requiring companies to terminate a business relationship if negative impacts persist, regardless of action plans, has been deleted.
• Civil liability and NGO/trade union representation removed: EU-wide civil liability provisions have been removed, and the representation rights of NGOs and trade unions have been revoked. Disputes will now be governed by national law.

Our take

With the postponement and proposed adjustments to compliance deadlines, companies may be tempted to push the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) to the background.

We want to emphasize that the CSRD is not merely a reporting requirement—it is a tool for gaining insights into your sustainability approach and ensuring the resilience of your business model. Providing investors, employees, and other stakeholders with clear, structured data on how your company is future-proof is a significant asset. The CSRD supports your business in this exercise. Sustainability reporting has been a longstanding practice, allowing companies to distinguish themselves from competitors and engage effectively with internal and external stakeholders. This remains crucial for both small, medium and large companies.

At the same time, the due diligence process designed to direct your efforts and resources toward addressing impacts that are most severe. As we know, the most severe adverse impacts often do not originate from the operations of your direct business partners. It is crucial that the new proposed amendments do not lead companies toward superficial, box-ticking exercises or self-assessments of partners who are not directly contributing to adverse impacts. Instead, resources should be allocated where they can drive real change. The OECD Guidelines and UN Guiding Principles provide a solid and internationally accepted frameworks to support this approach. Integrating due diligence in a holistic manner, throughout the value chain, will help build a resilient business model by enabling you to identify and address risks your company causes, contributes to, or is linked to.

We are committed to helping you navigate compliance and our focus will always be on actions that create meaningful impact. For the CSRD, this means identifying and reporting on how your business model can become—or already is—more resilient. For the CSDDD, this means focusing resources on addressing the most severe impacts that truly matter, ensuring they are put to good use.

Next steps

The legislative proposals will now be submitted to the European Parliament and the Council for their consideration and adoption. The changes on the CSRD and CSDDD will enter into force once the co-legislators have reached an agreement on the proposals and after publication in the EU Official Journal.

In line with the Communication on simplification and implementation published on 11 February, during the press conference, European Commissioner Dombrovskis stated that they will propose to the co-legislators to subject these proposals to the fast-track adoption. In this case, the request for an urgent decision would need to be announced in the European Parliament as soon as possible, with a vote on the request taking place at the beginning of the next sitting after the announcement. This would facilitate the use of simplified or accelerated procedures. In the meantime, at the Competitiveness Council (Internal Market and Industry) on 12 March, Ministers will already be invited to react to the First Omnibus Package on Sustainability.

We are happy to discuss the latest insights with you. Please contact Ruth for CSDDD and Tijmen for CSRD-related questions.