OMNIBUS: Reduction of Regulatory Requirements in the Field of Sustainability

European Commission’s Omnibus Package – Key Changes

On February 26, 2025, the European Commission introduced the so-called Omnibus Package, aimed at simplifying existing sustainability legislation and reducing the administrative burden for businesses, especially SMEs. Below is an overview of the key changes proposed in the Omnibus Package:

CSRD Reporting (Non-Financial Reporting)

• Postponement of reporting obligations:
  • First wave (companies with more than 1,000 employees and turnover exceeding €50M or a balance sheet total over €25M): These companies will report for 2024, but some companies currently reporting (between 500 and 1,000 employees) may not be required to disclose this information in their annual report next year.
  • Second wave (other large companies): First reporting for 2027.
  • Third wave (listed SMEs): First reporting for 2028.
  • Fourth wave (non-EU companies meeting certain criteria): Adjustments to criteria for non-EU companies required to disclose information under CSRD, and likely a postponement of the first reporting deadline.
• Simplification of ESRS standards (reduction in the number of data points, clarification of certain provisions, and increased consistency with other regulations). It is not yet clear which specific parts of ESRS will be removed or adjusted.
• Sector-specific standards will not be applied.
• Companies not required to report under CSRD may use a voluntary reporting standard based on EFRAG’s VSME standard (a draft already exists). This standard will also define the scope of information that can be requested from non-reporting companies.
• Audit requirements will remain at "limited assurance" – there will be no transition to "reasonable assurance".
• A financial materiality threshold will be introduced for EU Taxonomy reporting (eligibility and alignment assessment will not be required for activities that account for less than 10% of total turnover, CapEx, OpEx, or balance sheet total). The scope of reporting templates will also be reduced.
• GAR calculation will be simplified – companies that do not report under CSRD may be excluded from the denominator.
• Certain DNSH criteria will be simplified.

CSDDD (Corporate Sustainability Due Diligence Directive)

• Obligation to comply with CSDDD will be postponed by one year (for the largest companies):
  • The CSDDD scope remains unchanged, applying to companies with more than 1,000 employees and turnover above €450M.
  • The one-year delay applies only to the largest companies, likely merging the first and second phases, meaning that by 2029, companies with over 3,000 employees and turnover above €900M will be required to report.
• Simplified due diligence requirements, focusing primarily on direct business partners.
• Monitoring and assessment frequency for business partners reduced from 1 year to 5 years.
• Reduced information requirements for large companies requesting data from SMEs, limited to information specified in the voluntary VSME standard.
• The requirements for transition plans will be aligned with the CSRD.
• The obligation to assess the inclusion of financial services within CSDDD has been removed – meaning that banks will likely not be required to apply CSDDD requirements to their clients.

CBAM (Carbon Border Adjustment Mechanism)

• Small importers will be exempt from CBAM requirements (especially SMEs and self-employed individuals). A new threshold of 50 tons of CBAM-covered goods per importer per year will be introduced (expected to exempt 90% of importers from CBAM obligations).
• Simplification of authorization rules for CBAM declarants and other obligations related to CBAM (e.g., emissions calculation and reporting requirements).

Beyond the areas mentioned above, Omnibus also includes measures related to sustainable investments.
The package is now awaiting approval by the European Parliament and the European Council.

ARM Services Related to the Above-Mentioned Regulatory Requirements, ARM can offer you, among others:

• Gap analyses to assess compliance with the specified regulatory documents.
• Assistance in developing practically implementable methodologies for processes related to due diligence, non-financial reporting, and GHG emissions calculations.
• Collaboration in meeting specific regulatory requirements.
• Consultations on developing transition plans and decarbonization strategies.
• Training sessions and workshops on CSRD, CSDDD, and CBAM.