The Omnibus Simplification Package explained

Proposed changes: CSRD

The proposed scope and timing requirements of CSRD are:

• Companies subject to reporting on FY24 data as part of Wave 1 that have more than 1,000 employees remain in scope.

• Large companies and parents of large groups, which have more than 1,000 employees and either a net turnover exceeding €50M or a total balance sheet exceeding €25M (Wave 2), remain in scope, however, there is now a proposal to postpone, by two years, the reporting requirements for these companies (as well as those Wave 3 reporters). 

• For non-EU-headquartered companies, the revenue threshold is increased from €150 million to €450 million.

Additionally, there are some further changes proposed in the content of the reporting obligations:

• The first set of European Sustainability Reporting Standards (ESRS) are to be revised with an envisaged reduction in data points, focusing on quantitative datapoints rather than qualitative data points. 

• Reporting undertakings will not be required to seek additional sustainability information from SMEs in their value chain beyond what is specified in the voluntary standards for undertakings.

• Sector-specific standards for sustainability reporting will no longer be issued.

• The requirement to adopt standards for reasonable assurance will be removed.

• Listed SMEs will not need to report on the Listed SME standards but may voluntarily report on VSME (Voluntary ESRS for SMEs) like any other SME.

Proposed changes: EU Taxonomy

For the EU Taxonomy Regulation most of the proposed changes concern the content and the scope of the reporting obligations:

• EU Taxonomy remains in scope for large companies with over 1,000 employees on average and a net revenue above €450 million.

• Taxonomy reporting will be voluntary for large undertakings with more than 1,000 employees but with a net turnover not exceeding €450 million.

• The proposal introduces simplified reporting templates to reduce the burden on both non-financial and financial undertakings, cutting data points for non-financial undertakings and credit institutions by 66% and 89% respectively.

• Certain KPIs applicable to credit institutions are delayed until 2027.

Proposed changes: CSDDD

The proposed changes to CSDDD consider proportionality and shared responsibility, while preserving the substance of the directive. These include the following:

• A change in the phase-in for the first wave of companies in scope €1.5 billion turnover, >5,000 employees), which has been postponed from 26 July 2027 to 26 July 2028, aligning application of the CSDDD with the implementation date of the second wave. There is no expected delay for other companies in scope.  

• The climate transition plan adoption remains, with slight nuances.

• The directive presents a novel approach to the in-depth assessments that prioritises direct business partners. Indirect suppliers may still need to be engaged if plausible information of adverse impacts can be found. 

• As with CSRD, requests for information for SMEs will also be limited to the data requested by the voluntary sustainability reporting standard.

• Each EU member state will define the financial penalties for non-compliance, removing the 5% minimum cap of worldwide turnover and deferring to further guidance by the EC in collaboration with Member States.

• Member states will not be able to introduce more ambitious measures with regards to due diligence obligations.

Next steps: the timeline of the Omnibus Package

• Step 1: The ESG Omnibus Proposal was published on 26 February 2025.

• Step 2: The Omnibus legislative process is expected to take around three to four months (fast-track) if the Commission’s proposal finds sufficient support in the Council of the EU and European Parliament.

• Step 3: The Omnibus package would then need to be approved by both co-legislators and published in the Official Journal of the EU.

• Step 4: Once published, the text gives a 12-month period for all EU member states to incorporate into their national law (transposition).

• Step 5: The EU Commission aims to adopt the revised ESRS at the latest six months after the proposal is published in the Official Journal of the EU.

We are here to help you

For detailed information see the general publication from the EU with the latest extended updates and the Q&A additional official guidance from the European Commission. Or check PwC's Global Viewpoint document.

Moving forward in the year, the EU Competitiveness Compass and European Commission Work Programme 2025, provide a roadmap on future developments of EU law. Interested in discussing the impact of the Omnibus Simplification Package on your organisation? Get in touch.