On 26 February, the European Commission published the Omnibus proposal. The package of measures aims to simplify rules on sustainability and boost competitiveness.

The proposed measures reduce the scope and content of the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Taxonomy.

These regulatory changes come at an inconvenient time, leaving companies uncertain about their reporting requirements after investing significant time and money in preparing for CSRD compliance.

Clarity will take several more months, as the Omnibus package still needs approval from the European Parliament and the Council of Europe, which could result in changes. It’s no surprise that many companies are frustrated.

Uncertainty for companies that still fall within the new thresholds

If your company still meets the revised thresholds, you will have to wait for clarity on your exact reporting requirements. While the double materiality assessment will still determine these requirements, the new list of data points will come with the release of the streamlined European Sustainability Reporting Standards (ESRS). Moreover, the 2-year delay of the introduction of mandatory reporting may mean that the double materiality assessment will need to be updated closer to the first reporting period.

If you’re in this group, we advise to focus on developing robust processes and systems for collecting and managing quantitative data on their most material topics, especially Climate. The Commission has indicated it plans to prioritise quantitative data points in the simplification of the ESRS, and reliable and complete sustainability data will also help these companies improve their sustainability performance.

A strategic decision for companies that now fall outside the new thresholds

If your company is among the 40,000 companies that fall outside the proposed new thresholds, you may hear in the coming months that you won’t have to publish a CSRD report after all. After a first reaction of relief and frustration, you will need to decide how they will proceed with your sustainability agenda in absence of compliance requirements.

We see broadly three possible responses:

• You can continue as planned and implement policies, actions and targets for material sustainability topics and publish a CSRD-aligned report on progress.
• You can decide to reorientate your sustainability strategy around topics that are strategic for the business.
• Or you can deprioritise sustainability and focus on delivering short-term financial results.

We expect most companies to opt for reorientation. The double materiality assessment has deepened their understanding that sustainability brings real business risks and opportunities. By narrowing focus on these risks and opportunities, as well as stakeholder priorities and other regulatory requirements, they will decide which parts of their sustainability agenda they will take forward.

To prepare for CSRD-related data request from clients or business partners that still fall under the CSRD, you can use the new voluntary reporting standards as guidance, because these will determine which data your clients can ask of you.

What should UK businesses do?

If you are a UK business preparing to report in 2026 and have completed your double materiality assessment, your efforts haven’t been wasted. The CSRD-aligned double materiality is an ideal tool for preparing to report against GRI and the upcoming ISSB/IFRS requirements under the UK SRS. It provides a robust approach to understanding your impacts, risks, and opportunities, laying a solid foundation for reporting on both impact materiality (via GRI) and financial materiality (via ISSB/IFRS). Moreover, it enhances your ability to respond to stakeholder expectations and strengthens your long-term resilience by identifying emerging risks and opportunities early.

Additionally, even if you are now outside the CSRD scope, you may still need to supply data to CSRD-reporting companies using the voluntary reporting requirements. Being prepared for this will not only ensure compliance but also maintain strong business relationships and competitive positioning within the supply chain.

What changes does the first Omnibus package propose to the Corporate Sustainability Due Diligence Directive and the EU Taxonomy?

Corporate Sustainability Due Diligence Directive

• Reduced frequency of due diligence: From annual to 5 years, with ad hoc assessments where necessary.
• Focus on tier 1 suppliers: Focusing systematic due diligence requirements on direct business partners, unless there is evidence of risks further down the supply chain.
• Reduced scope of data requests to SMEs: Limiting the amount of information that may be requested as part of the value chain mapping by large companies.
• Removal of EU-wide civil liabilities: Cases to be handled under national laws.
  One-year delay in implementation: With the new compliance date being July 2028.

EU Taxonomy

• EU Taxonomy only mandatory for the largest companies (>1,000 employees and >EUR450m turnover), with opt-in for other large companies within the future scope of the CSRD (EUR50m to EUR450m turnover).
• Simplifying complex “Do no significant harm” (DNSH) criteria, starting with those for pollution prevention and control related to the use and presence of chemicals.

To talk through what this means for your business further, reach out to one of our experts below.