The EU Omnibus Package on Sustainability Disclosure

What it means for your organisation and how to respond

9 July 2025

In February 2025, the European Commission announced a new package of proposals aimed at streamlining sustainability reporting, known as the EU Omnibus Directive. Although some elements are pending legislative approval, the announcement has created uncertainty for businesses navigating key regulations, including the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), and EU Taxonomy.

This article outlines what we know, what’s coming next, and how businesses should prepare.

What we know: The EU Sustainability Simplification Omnibus package

In November 2024, the Commission signalled plans to reduce the reporting burden on companies by aligning and simplifying sustainability legislation. On the 26^th of February 2025, the first ‘Omnibus Package’ was published, proposing changes to:

Corporate Sustainability Reporting Directive (CSRD): A directive requiring companies to disclose environmental, social, and governance (ESG) impacts to enhance corporate transparency and accountability.
Corporate Sustainability Due Diligence Directive (CSDDD): A directive mandating companies to identify, prevent, and mitigate adverse human rights and environmental impacts in their operations and chains of activities.
EU Taxonomy Regulation: A classification system defining environmentally sustainable economic activities to guide investment and corporate sustainability practices.
Carbon Border Adjustment Mechanism (CBAM): A regulation imposing a carbon price on imported goods entering the EU to prevent carbon leakage and promote global emissions reduction.

What has happened since?

3^rd April: The European Parliament voted on the EU Omnibus stop-the-clock proposal to approve some of the proposed changes affecting reporting deadlines, which became an effective CSRD Amendment on the 17^th of April. The changes included:
- CSRD: A two-year postponement for companies in their second and third reporting waves that haven’t yet reported, who will now be required to publish their first reports in 2028 and 2029, respectively. There is no delay for EU-listed companies that are already reporting to the CSRD.
- CSDDD:
  - Member States will have an additional year, until July 2027, to transpose the rules into national legislation.
  - Large companies and non-EU firms in the EU within a certain threshold will have until July 2028 to comply.
23^rd June 2025: The EU Council proposed language changes to simplify and clarify corporate sustainability reporting and due diligence requirements, including company size thresholds, reporting scope under CSRD, and due diligence scope under CSDDD.
Earlier in June: The European Parliament, via the Legal Affairs Committee (JURI), issued a draft report. Members of the European Parliament (MEPs) and other political groups had until the 27^th of June to submit their proposed amendments to the report. A plenary debate and vote are expected in October to establish the Parliament’s official position, before it enters into negotiations with the European Council and the European Commission to reconcile differences between legislative positions.
4^th July 2025: The European Commission announced a set of measures to simplify the EU Taxonomy, in line with the Omnibus Package.
July/November 2025: The European Financial Reporting Advisory Group (EFRAG) is preparing a second draft of the revised European Sustainability Reporting Standards (ESRS), expected in July 2025, with final technical guidance due to be submitted to the European Commission by the end of November 2025.

In addition, the European Commission issued a related ‘Omnibus IV’ package on 21^st May 2025, which includes amendments to the EU Batteries Regulation. Like the original Omnibus Package, it includes a two-year delay to enforcement of the battery due diligence obligations, which have subsequently been approved.

Here is what we know so far following those updates.

Chris Shaw

Technical Director

ESG & Reporting

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What is still at the proposal stage?

The wider package, still subject to legislative approval, introduces the following additional key changes:

CSRD	Commission Proposal (25^th Feb 25)	Council Position (23^rd June 25)	EU Parliament (JURI) Proposal (6th June 25)
Timeline	Delay wave 2 (large non-EU and EU subsidiaries) & wave 3 (listed SMEs) by 2 years (to 2028)	Agrees on delays	Agrees on delays
Scope – thresholds	Increases, limiting mandatory compliance to companies with >1,000 employees and either >€50 million turnover or €25 million balance sheet	Aligned, but increased the turnover requirement to ≥€450 million	Much stricter: Raises in line with the CSDDD and EU Taxonomy to >€450 million net turnover and >3,000 employees worldwide. Additionally, raises the net turnover criteria for EU branches from €40m to €450m.
Key requirements	Assurance: Removes mandatory reasonable assurance, keeps limited assurance Double materiality: Remains a key element of the CSRD Value chain data: Limits requests from smaller companies SMEs Introduction of a voluntary reporting standard (VSME) for companies no longer in scope	Value chain data: Provides some exemptions to subsidiary reporting and flexibility to SMEs to refuse information requests	Value chain data: Expands limits, adding a requirement to explain where necessary data isn’t available and how they will obtain for future Expands limits for smaller companies to what is reasonably available Introduces the term ‘chain of activities’ (as used in the CSDDD) to replace ‘value chain’, ensuring consistency Other: Exempts ultimate parent companies that are financial holding entities and not involved in management, provided a designated EU subsidiary reports on their behalf Removes allowance for member states to introduce more stringent due diligence requirements Clarifies that trade secrets and certain information are generally exempt

CSRD

Commission Proposal (25^th Feb 25)

Council Position (23^rd June 25)

EU Parliament (JURI) Proposal (6th June 25)

Timeline

Delay wave 2 (large non-EU and EU subsidiaries) & wave 3 (listed SMEs) by 2 years (to 2028)

Agrees on delays

Scope – thresholds

Increases, limiting mandatory compliance to companies with >1,000 employees and either >€50 million turnover or €25 million balance sheet

Aligned, but increased the turnover requirement to ≥€450 million

Much stricter: Raises in line with the CSDDD and EU Taxonomy to >€450 million net turnover and >3,000 employees worldwide.

Additionally, raises the net turnover criteria for EU branches from €40m to €450m.

Key requirements

Assurance:

Removes mandatory reasonable assurance, keeps limited assurance

Double materiality:

Remains a key element of the CSRD

Value chain data:

Limits requests from smaller companies

SMEs

Introduction of a voluntary reporting standard (VSME) for companies no longer in scope

Value chain data:

Provides some exemptions to subsidiary reporting and flexibility to SMEs to refuse information requests

Value chain data:

Expands limits, adding a requirement to explain where necessary data isn’t available and how they will obtain for future
Expands limits for smaller companies to what is reasonably available
Introduces the term ‘chain of activities’ (as used in the CSDDD) to replace ‘value chain’, ensuring consistency

Other:

Exempts ultimate parent companies that are financial holding entities and not involved in management, provided a designated EU subsidiary reports on their behalf
Removes allowance for member states to introduce more stringent due diligence requirements
Clarifies that trade secrets and certain information are generally exempt

Alongside the negotiations listed above, EFRAG is reviewing the content of the ESRS with final technical guidance due to release in November 2025. Find out more about the proposed ESRS changes here >

CSDDD	Commission Proposal (25^th Feb 25)	Council Position (23^rd June 25)	EU Parliament (JURI) Proposal (6^th June 25)
Timeline	1-year delay for large companies, to 2028 A 1-year extension for Member States to transpose the rules into national legislation, until 26 July 2027	Delays for all companies to July 2029 Postpones the member state transposition deadline to July 2028 1-year postponement for the release of additional European Commission guidance to 26th July 2027	Agrees with the Commission’s delay
Scope (thresholds)	No change	Increases to >5,000 employees and >€1.5 billion net turnover for EU companies, and €1.5 billion turnover in the EU market for non-EU companies	Raises in line with the CSRD and EU Taxonomy to >€450 million net turnover and >3,000 employees worldwide
Key requirements	Assessments: Limits in-depth assessments of impacts in Tier 2+ supply chains (unless there is plausible information that they have arisen or may arise) Reduces the frequency of periodic assessments and monitoring required from annual to every 5 years, with ad hoc assessments where necessary Climate Transition Plans (CTPs): Removes the requirement to implement CTPs (although maintaining the requirement to develop CTPs and include actions that have been implemented or planned) Value Chain Data: Limits the amount of data companies can request from smaller companies in their value chain	Assessments: Limits in-depth assessments of impacts to those that have been identified as most likely and severe based on the initial scoping exercise or if a company beyond tier 1 can be reasonably expected to know of these impacts Lightens requirements from a comprehensive mapping to a general scoping exercise, based on reasonably available information Clarifies stakeholder engagement requirements as proportional and only for certain parts of the due diligence process Climate Transition Plans (CTPs): Further limits and postpones for 2 years the requirement to implement CTPs, aligning with the CSRD, to an outline of implemented and planned actions Value Chain data: Agrees the focus on Tier 1 suppliers (own operations, subsidiary operations and direct business partners) Further limits data requests from smaller companies to necessary information that cannot be obtained by other means Clarifies the requirement to suspend a business relationship to a last resort, while working with the supplier on a solution	Assessments: Reduces due diligence, including focusing on adverse impacts identified to be most likely to occur and most severe Limits remedy obligations and restricts contractual disengagement Climate Transition Plans (CTPs): Removes requirements, limiting to reporting on existing transition plans if companies have them Value Chain data: Enforces strict Tier-1 limitation

CSDDD

Commission Proposal (25^th Feb 25)

Council Position (23^rd June 25)

EU Parliament (JURI) Proposal (6^th June 25)

Timeline

1-year delay for large companies, to 2028
A 1-year extension for Member States to transpose the rules into national legislation, until 26 July 2027

Delays for all companies to July 2029
Postpones the member state transposition deadline to July 2028
1-year postponement for the release of additional European Commission guidance to 26th July 2027

Agrees with the Commission’s delay

Scope (thresholds)

No change

Increases to >5,000 employees and >€1.5 billion net turnover for EU companies, and €1.5 billion turnover in the EU market for non-EU companies

Raises in line with the CSRD and EU Taxonomy to >€450 million net turnover and >3,000 employees worldwide

Key requirements

Assessments:

Limits in-depth assessments of impacts in Tier 2+ supply chains (unless there is plausible information that they have arisen or may arise)
Reduces the frequency of periodic assessments and monitoring required from annual to every 5 years, with ad hoc assessments where necessary

Climate Transition Plans (CTPs):

Removes the requirement to implement CTPs (although maintaining the requirement to develop CTPs and include actions that have been implemented or planned)

Value Chain Data:

Limits the amount of data companies can request from smaller companies in their value chain

Assessments:

Limits in-depth assessments of impacts to those that have been identified as most likely and severe based on the initial scoping exercise or if a company beyond tier 1 can be reasonably expected to know of these impacts
Lightens requirements from a comprehensive mapping to a general scoping exercise, based on reasonably available information
Clarifies stakeholder engagement requirements as proportional and only for certain parts of the due diligence process

Climate Transition Plans (CTPs):

Further limits and postpones for 2 years the requirement to implement CTPs, aligning with the CSRD, to an outline of implemented and planned actions

Value Chain data:

Agrees the focus on Tier 1 suppliers (own operations, subsidiary operations and direct business partners)
Further limits data requests from smaller companies to necessary information that cannot be obtained by other means
Clarifies the requirement to suspend a business relationship to a last resort, while working with the supplier on a solution

Assessments:

Reduces due diligence, including focusing on adverse impacts identified to be most likely to occur and most severe
Limits remedy obligations and restricts contractual disengagement

Climate Transition Plans (CTPs):

Removes requirements, limiting to reporting on existing transition plans if companies have them

Value Chain data:

Enforces strict Tier-1 limitation

EU Taxonomy	Commission Proposal (25^th Feb 25)	Council Position (23^rd June 25)	EU Parliament (JURI) Proposal (6^th June 25)
Scope (thresholds)	Relaxation of rules for companies with >1,000 employees and a turnover below EUR 450 million by making the reporting of Taxonomy voluntary, and the option of reporting on partial Taxonomy-alignment	Not mentioned	Raises in line with the CSRD and CSDDD to >€450 million net turnover and >3,000 employees worldwide

On the 4^th of July, the European Commission announced a set of measures to simplify the EU Taxonomy, in line with the Omnibus Package. While still subject to review by the Parliament and Council, the updated rules are due to begin in 2026, covering the 2025 financial year. Find out more about the proposed changes, here.

What’s driving the initiative?

This Package is the EU’s response to concerns about the complexity of sustainability reporting requirements and remaining competitive within the broader global economic landscape. Some believe that EU regulations create an uneven playing field compared to markets like the U.S. and China, placing an administrative burden on companies. Anti-ESG lobbyists, including some oil and gas companies and carbon-intensive industries, claim that excessive regulation puts the EU at a disadvantage.

While there is room to streamline the regulations, properly implemented, these regulations can enhance competitiveness by increasing transparency and promoting cleaner, more environmentally aligned products and services. The core concepts of ESG regulation, including the CSRD and CSDDD, make sound business sense. The EU has historically led on ESG, and this should be a competitive advantage it should seek to maintain.

Governments, large businesses, and regulatory bodies have also expressed support for the existing regulations, raising concerns about the uncertainty this review process has introduced. In July 2025, nearly 200 signatories, including over 150 businesses and investors, issued a joint statement urging EU policymakers to retain the core elements of the EU’s sustainability framework. These include maintaining double materiality, the inclusion of companies with 500+ employees, value chain transparency, risk-based due diligence, and climate transition planning.

Resistance to sustainability regulation isn’t new. We saw similar resistance when financial disclosure requirements were introduced, yet today, transparent financial reporting is considered fundamental to market confidence. The same will soon be true for sustainability. ESG data auditing may seem new now, but financial auditing also evolved into a rigorous and regulated norm.

How should your business respond?

Despite ongoing uncertainty, businesses should continue with sustainability reporting and due diligence. The ESG agenda isn’t driven by regulators alone – it is driven by investors, consumers, and corporate stakeholders. This hasn’t changed.

The CSDDD and CSRD due diligence requirements are grounded in long-standing voluntary standards, such as the UN Guiding Principles on Business and Human Rights (UNGPs) and OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. Standardising these expectations through regulations aims to enable fair comparability and transparency, not to lead the agenda.

If you’re unsure about what to do next, speak to your Anthesis representative, legal advisors, and financial auditors. The proposed changes are subject to amendment and need interpretation for each business’s unique structure.

In short, to support your reporting planning under CSRD, we advise that:

EU listed large companies – maintain business as usual

If you reported against CSRD in FY2024, and the Non-Financial Reporting Directive (NFRD) before that, there are no changes to thresholds or timelines. While simplification of the ESRS is underway, there may limited opportunity to respond to the changes in your next report. Focus on aligning with its intent by developing strategies to manage your Impacts, Risks, and Opportunities (IROs) and that you are clearly reporting on how they align with the actions you’re taking, the metrics and KPIs you’re using, and your performance.

Find out more about the proposed changes to the ESRS here

Businesses due to report in FY2025 – do not press pause on your planned actions

For companies with a two-year delay, use this time to prepare. If you haven’t already, start your double materiality assessment, using the draft ESRS revisions as a guide. This will give you time to collect data, close gaps, and shape an integrated sustainability strategy ahead of the FY2027 deadline.

If you’ve already finalised your Double Materiality Assessment, begin preparing for a gap analysis focused on at least three core ESRS: E1 (Climate), S1 (Own Workforce), and G1 (Business Conduct). Analysis of existing reports from Wave 1 companies shows that these were universally adopted, making them a logical and low-risk starting point. Prioritising mandatory quantitative disclosures within these ESRS will help maintain momentum without overcomplicating early-stage reporting efforts.

See our recent webinar recording for more information >

SMEs – take a stakeholder-focused approach

Even if requirements shift, early action has benefits. Conducting a Double Materiality Assessment will help meet investor expectations, improve your corporate reputation, support your value chain relationships, and identify and benefit from better risk management and cost efficiencies ahead of potential regulatory changes.

To support your due diligence planning under CSDDD, we advise that:

Large companies – continue existing due diligence programmes

If you fall under the CSDDD, under the original or newly proposed thresholds, it is essential to continue your existing due diligence efforts. The directive is reasonable and proportionate but requires robust prioritisation. Invest time and effort in properly conducting scoping or mapping activities to identify potential and actual impacts across your operations and chains of activities. This will position you to respond to many of the CSDDD requirements, whether the directive focuses on Tier 1 or expands beyond.

SMEs – identify due diligence focus areas

You may not fall directly under the scope of CSDDD, but you are likely part of the value chains of larger companies that do and may receive information requests about your due diligence practices. Standardising your approach now will help you respond efficiently while managing reputational and operational risks.

Adapt, don’t pause

The core principles of EU sustainability regulation, like Double Materiality and impact prioritisation, represent best practice and aren’t going away. These frameworks offer strategic value, strengthen governance, support risk management, and improve stakeholder communication.

Given legislative timelines, businesses shouldn’t wait for final outcomes before acting. Stay the course, remain adaptable, and continue investing in efforts that build resilience and long-term business value.

There is no reason for most companies to question or dial down their ESG efforts in response to these regulatory changes. It is investors, corporates and consumers that have heavily steered progress to date on ESG; the role of regulation is to provide the standardised methodology and approach to allow comparability. Carefully implemented, ESG frameworks offer value beyond compliance, whether that’s strategic insights, stronger governance, or a sharper focus on stakeholder priorities – and many business leaders know this. Those that stay on course in reporting, maintain a sound understanding of materiality, and take positive action will find themselves ahead in terms of resilience, competitiveness and stakeholder confidence.

Chris Shaw, Technical Director, ESG & Reporting

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