EU Omnibus Measures Simplify Corporate Sustainability Reporting: Key Changes & Benefits

The new EU omnibus measures simplify sustainability reporting and reduce the workload for companies, marking a pivotal shift in the regulatory landscape. Here is an overview of the most important changes, contextualized within the broader EU sustainability agenda:

• Reporting obligation: The employee threshold increases from 250 to 1,000, meaning up to 80% of companies could be exempt from reporting requirements. According to the European Commission, this adjustment could relieve approximately 85% of currently reportable companies, especially benefiting mid-sized enterprises that previously struggled with compliance costs.
• Deadlines: Reporting for large companies is postponed to 2028; SMEs also receive more time, allowing organizations to strategically plan and implement robust ESG data systems.
• Simplifications:
  • EU taxonomy becomes voluntary for companies with less than €450 million in revenue, significantly reducing the administrative burden for smaller market players.
  • Focus shifts to direct suppliers (Tier-1) instead of the entire supply chain, aligning with industry calls for more manageable due diligence scopes.
  • Less detailed data collection is required, with simplified templates replacing previous granular specifications.

Benefits and Challenges:

• Benefits: Cost reductions of 25% for large companies and 35% for SMEs are projected, with longer deadlines enabling more strategic ESG planning. These savings are particularly significant given that, according to a recent survey, nearly half of companies believe the benefits of CSRD reporting now outweigh the costs, especially as data consolidation and transparency improve.
• Risks: Without proactive preparation, companies still face penalties and reputational damage, especially as market and investor expectations for sustainability disclosures continue to rise.

Tip: Use digital tools and conduct a double materiality analysis to create long-term value. Early adoption of digital ESG platforms can streamline compliance and facilitate audit readiness.

Stay informed and adapt your ESG strategy early to maintain a competitive edge as regulatory expectations evolve.

Omnibus Simplification Package: Changes, Assessment ...

Key Changes to Reporting Obligations

The Omnibus Simplification Package introduces a suite of changes designed to reduce the administrative burden of sustainability reporting without compromising the quality or comparability of disclosures. This approach reflects ongoing feedback from industry stakeholders and aligns with the EU’s commitment to fostering a sustainable, competitive economy.

Fewer Reporting Obligations

One of the central changes is the proposed increase in the employee threshold from 250 to 1,000. This adjustment could mean that around 85% of currently reportable companies will no longer fall under the CSRD requirement, freeing up resources for innovation and growth.

For large companies with annual revenue below €450 million, the following reliefs apply:

These changes respond to industry feedback that previous requirements were overly complex for smaller entities and often resulted in disproportionate compliance costs relative to company size.

New Implementation Deadlines

The deadlines for implementing reporting requirements have been changed as follows:

• Large companies (Wave 2): Start of reporting postponed to January 1, 2028 (instead of 2026), providing a two-year window for process optimization.
• SMEs (Wave 3): Extension of the implementation deadline to 2028, offering additional time for capacity building.
• CBAM certificates: Purchase obligation postponed to February 2027, aligning sustainability reporting with other EU climate initiatives.

Requirements for Double Materiality

Despite deadline changes, the double materiality analysis remains a central component of CSRD reports. Companies must continue to consider two perspectives:

1. Outside-in perspective: This assesses how external factors—both financial and non-financial risks and opportunities—affect company performance.
2. Inside-out perspective: This focuses on the company’s impact on the environment and society, including both positive and negative effects.

"The European Commission does not intend to change the core of the laws with the Omnibus Package. Instead, it focuses on revising and streamlining existing regulations without undermining the efforts already made by companies."

These adjustments aim to reduce the reporting burden by 25% for large companies and 35% for SMEs, as estimated by the European Commission.

Impact on Companies’ ESG Programs

The changes in reporting obligations also affect the practical implementation of ESG programs. Companies are encouraged to leverage the extended timelines to enhance their data infrastructure and integrate sustainability into core business processes.

Meeting the New Standards

Companies must adapt their ESG strategies to the new omnibus measures and improve their data foundation. The extended deadlines offer the opportunity to develop more efficient reporting processes, automate data gathering, and foster systematic stakeholder engagement.

Cost and Time Savings

The simplified reporting obligations are intended to reduce costs for large companies by 25% and for SMEs by 35% [1]. However, some experts question whether a blanket approach fully addresses the nuances of sustainability reporting, especially for companies with complex supply chains or significant environmental impacts.

"The EU is changing its tactics, but not its commitment to sustainability. The spirit of EU legislation—to promote transparency and non-financial data—remains and will stay intact." - Tsvetelina Kuzmanova, Sustainable Finance Lead, Cambridge Institute for Sustainability Leadership, Europe

Integration of International Standards

Aligning EU standards with international frameworks such as GRI and ISSB is increasingly important. For successful implementation, companies should:

• Build strong ESG data management systems
• Accurately record CO₂ emissions (Scope 1, 2, and 3)
• Conduct regular materiality analyses
• Monitor ongoing regulatory developments

"Keep a cool head. The coming weeks will be crucial for the pace and direction of this proposal. Check whether you will ultimately be affected anyway. For many companies, it’s just a matter of when, not if." - Elisabeth Ottawa, Head of Public Policy Europe at Schroders

This underscores the importance of continuous monitoring and agile adaptation in ESG strategy.

Risks and Benefits

Implementation Risks

New reporting obligations can pose challenges for companies. Without sufficient preparation, they risk financial penalties, reputational damage, and restricted market access [1]. For example, a 2023 study found that 30% of companies cited data quality and timeliness as their biggest hurdles in ESG reporting, highlighting the need for robust internal controls.

Here are measures to mitigate these risks:

Especially the quality of non-financial data is a challenge. Companies that start preparations too late will be under significant time pressure later. Nevertheless, well-planned measures can enable long-term savings and improved stakeholder trust.

Cost-Reducing Benefits

A new study on the CSRD (n=422) shows that around 50% of surveyed companies see either more benefits than costs or consider both to be balanced. The main benefits cited include improved consolidation of sustainability data, greater transparency for stakeholders, and better risk and opportunity management. Notably, companies that invested early in digital ESG platforms reported up to 40% faster reporting cycles and fewer audit findings.

SMEs, however, are much more critical of the cost-benefit ratio: 77% see the costs as higher than the benefits. This is hardly surprising—many had barely conducted structured ESG data analyses before the CSRD, making the first reporting cycle particularly challenging. Yet, this also presents an opportunity: SMEs that leverage the transition period to build scalable ESG processes can achieve long-term efficiencies and improved investor confidence.

Here are some possible savings:

• Automated data collection: Uniform data requirements make processes more efficient and reduce manual errors.
• Longer compliance deadlines: Strategic planning prevents costly ad hoc solutions and supports sustainable growth.
• Focus on relevant sustainability topics: Less administrative effort by concentrating on material issues that matter most to stakeholders.

"Regardless of legal requirements, companies should continue to conduct a double materiality analysis and build a solid ESG data foundation. These are measures that create long-term value." – Julia Staunig, Chief Growth Officer, Position Green

Early preparation not only improves organizational adaptability but also ensures more efficient processes [1].

Steps to Implementation

Keep Track of Changes

Monitoring regulatory developments plays a central role in sustainability reporting. Companies should continue to fulfill their existing reporting obligations until new regulations officially take effect. This proactive approach ensures compliance and builds resilience against regulatory uncertainty.

The Omnibus Regulation for the Corporate Sustainability Reporting Directive (CSRD) aims to simplify sustainability reporting in the EU and reduce reporting obligations for companies. Here is an overview of the process and timeline:

Process of the Omnibus Rules for CSRD

1. Proposal and Negotiations:
   • On February 26, 2025, the EU Commission presented the draft for the first Omnibus Package, proposing changes to the CSRD, the Corporate Sustainability Due Diligence Directive (CSDDD), and other regulations.
   • The proposal includes two main points:
     • “Stop-the-Clock” proposal: Postponement of reporting obligations by two years.
     • Simplification proposal: Reduction of reporting obligations and adjustment of the scope.
2. Voting and Approval:
   • The Council of the EU approved the postponement on March 26, 2025.
   • The European Parliament approved the “Stop-the-Clock” proposal on April 3, 2025.
3. Next Steps:
   • A trilogue procedure between the EU Commission, Parliament, and Council is expected to develop a final compromise text.
   • After approval by Parliament and Council, the regulation will be transposed into national law.

Timeline

• 2025: Negotiations and expected adoption of the new rules.
• 2026: Entry into force of extended deadlines for large companies.
• 2028: First reporting obligation for companies that would have originally had to report from 2026.

Use of Digital Tools

A well-structured reporting system makes it easier to comply with new requirements. Digital tools offer the following advantages:

• Centralized data collection and ESRS compliance: ESG data can be systematically collected and automatically checked against standards, reducing manual workload and error rates.
• Audit readiness: Preparation for external audits is significantly simplified, with audit trails and documentation readily available.

After introducing such tools, it is essential to develop a long-term ESG strategy that aligns with both regulatory requirements and business objectives.

Develop a Long-Term ESG Strategy

Despite the current changes, sustainability reporting remains a strategic element [1]. To future-proof your business, consider the following:

• Integration into business processes: Sustainability reports can be used as tools for risk management and operational improvements, not just compliance.
• Include supply chains: Proactive planning regarding new regulations can unlock potential business opportunities within supply chains and foster supplier collaboration.

By investing in reliable reporting systems, companies can effectively implement organizational adjustments such as increased sustainability performance, changes in governance, and prioritization of investments.

Conclusion

Key Takeaways

The described changes in the omnibus measures lead to a significant reduction in reporting scope—up to 80% of companies could be exempt from reporting obligations in the future. The key thresholds for companies that must continue to report are:

"This is still a proposal, not a final decision. The European Parliament and the Council of the EU must still approve it, and it will take time to reach a consensus. Companies should remain calm and focus on why they are reporting in the first place."

These points highlight how important it is to prepare professionally for the new requirements. By staying informed, investing in digital tools, and embedding sustainability into core business strategies, companies can not only meet regulatory expectations but also unlock long-term value and resilience. For further details and updates, visit the official EU CSRD page.