Omnibus Package: simplifications and challenges for sustainability in business

One of the most relevant proposals introduced by the Omnibus Package concerns the revision of the scope of CSRD. The ESG reporting obligation will indeed only affect companies with at least 1.000 employees and an annual turnover of more than € 50 million or a net worth of more than € 25 million. This revision considerably reduces the number of companies involved, excluding around 80 per cent of those previously subject to the regulation, for which the minimum requirements were set at 250 employees and € 50 million in turnover. The proposed measure also promotes greater alignment with the thresholds foreseen by the CSDDD, strengthening – according to the Commission – the consistency of the european regulatory framework. 

Companies that will continue to be subject to CSRD will be required to prepare sustainability reports in accordance with the European Sustainability Reporting Standards (ESRS), which will be subject to a review to simplify and harmonize the required data. Excluded companies, on the other hand, will be able to opt for voluntary reporting, based on a simplified standard developed by EFRAG for SMEs (VSME).

A further change concerns the postponement by two years, until 2028, of the reporting obligations for large companies that have not yet implemented CSRD and for listed SMEs, whose entry into the regulatory regime was foreseen for 2026 and 2027, respectively. 

The impact of the simplification introduced by the Omnibus Package on the CSDDD marks a significant change of course, easing obligations for companies and introducing a more flexible approach to controls along the supply chain. 

Firstly, the deadline for the transposition of the directive slips to 26 July 2028, giving companies an extra year to adapt.

At the same time, the Package introduces a streamlining of due diligence obligations, in particular with regard to the assessment of actual and potential negative impacts along the supply chain: if the Commission’s proposals are approved and transposed into the text of the CSDDD, obliged companies will only be required to conduct in-depth assessments beyond their direct trading partners if there is plausible information suggesting possible negative impacts. In the Commission’s view, this approach should make it possible to reduce complexity and economic impact of the regulation, allowing companies to focus their resources on monitoring direct trading partners and limiting the frequency of assessments on other actors in the value chain. 

The frequency of audits is also being revised: the periodic assessment of measures taken to assess ESG risks along the entire value chain will be changed from an annual to a five-yearly requirement, with ad hoc audits limited to cases where significant changes occur.

In parallel to the amendments to the CSRD and CSDDD, the Omnibus Package also proposes significant simplifications for the Taxonomy Regulation and the Carbon Border Adjustment Mechanism (“CBAM”). 

In particular, for companies falling within the future scope of CSRD (i.e. those with more than 1.000 employees), alignment with the taxonomy will become voluntary, reducing the number of companies currently obliged by 70 per cent​​. In addition, a financial materiality threshold will be introduced, excluding less sustainability-relevant activities from the reporting obligation.

On the CBAM front, the Package foresees an exemption threshold for importers with volumes below 50 tons of CO2 per year, relieving about 90 per cent of operators, mostly SMEs, without compromising emission reduction targets. At the same time, reporting requirements and emission calculations for companies still subject to the CBAM will be simplified, easing the administrative burden.

The Omnibus Package will now have to be reviewed by the European Parliament and the Council, but its content has already provoked mixed reactions. While companies welcome the reduction of bureaucratic burdens, there are also fears that these simplifications could water down the EU’s sustainability commitments. 

What is clear is that, beyond the regulatory downsizing, the market continues to reward transparency and sustainability. Postponing action in this area, waiting for the law to impose certain standards, could turn out to be a short-sighted strategy: only companies that invest in sustainability will be able to increase their value in the long run and position themselves as leaders in tomorrow’s global market.