top of page
Logo DuttCSRConsulting
Search

What the Omnibus deal means for sustainability reporting

  • Writer: Parisa Bazaz
    Parisa Bazaz
  • Dec 19
  • 2 min read

The EU’s Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS) have undergone major changes in 2025. Here’s what’s changed, what remains, and what’s next for companies navigating the new sustainability reporting landscape. 


Status & timeline 

On December 16th, after months of negotiation, the European Parliament adopted the Omnibus I package, which amends and simplifies the CSRD. The Council must now give formal approval to the final text. Once published in the EU’s Official Journal, the law will take 20 days to come into force. 


What has changed? 

CSRD:

  • Employee threshold raised to 1000 employees. 

  • Net turnover threshold increased to €450M. 

  • Listed SMEs are now exempt. 

  • Financial holding companies are now exempt. 

  • Companies that started reporting in FY2024 (“wave one”) but now fall out of scope will be exempt for 2025 and 2026. 

  • Future scope extensions will be reassessed in 2029. 

 

As a result, about 90% fewer companies will be required to report under CSRD. However, research reports still show a strong need for sustainability reporting to protect investments, customer satisfaction, and ultimately business value.  


ESRS simplification:  

  • Mandatory data points have been reduced by ~60%. 

  • Total disclosures have been reduced by ~70%. 

  • Sector-specific ESRS standards are removed.  

Materiality assessment: The Double Materiality Assessment (DMA) is now clearer, with less documentation.

Flexibility: New reliefs allow companies to omit information if collecting it would require “undue cost or effort.” However, this flexibility risks creating loopholes for greenwashing if not properly managed.  


Alignment: Enhanced interoperability with International Sustainability Standards Board (ISSB) standards and a focus on decision-useful information. 


Voluntary Sustainability Reporting Standard (VSME) 

Voluntary Sustainability Reporting Standard is a new voluntary framework for SMEs, now out of CSRD scope, to meet stakeholder expectations. To ensure that large companies do not transfer their sustainability reporting obligations onto smaller business partners, large companies are not allowed to request information from SMEs that goes beyond what is outlined in the VSME.  


What does all this mean in practice?


If you remain in CSRD scope:

  • Stay the course: CSRD remains a core compliance requirement, even if datapoints are simplified.

  • Use the coming year to refine your double materiality assessment, streamline data collection, and prepare to switch to simplified ESRS once adopted.

  • Expect continued scrutiny from investors, banks and civil society, particularly around the use of “undue cost or effort” and decisions to treat topics as non-material.


If you fall out of CSRD scope:

  • Do not assume the topic disappears. Your owners, banks, large customers and public buyers will still ask for credible sustainability data, often aligned with CSRD/ESRS structure.

  • You may want to maintain a “light CSRD” approach or adopt VSME so you can respond efficiently to information requests and remain competitive in procurement and financing processes.


If you are an SME in larger value chains:

  • Consider adopting VSME to standardise how you report sustainability information.

  • Use it to set a realistic level of ambition internally, while protecting your organisation from ad-hoc, duplicative questionnaires from multiple large customers.


Resources & further reading 

Comments

bottom of page