CSRD and the Omnibus: What’s Changed?

The Corporate Sustainability Reporting Directive (CSRD) has undergone key updates with the introduction of the Omnibus Regulation. This new regulation refines compliance requirements, timelines, and reporting obligations, aiming to provide clarity and reduce administrative burdens. Here’s what’s changed and what businesses need to know moving forward.

What is the CSRD?

The CSRD is an EU regulation that expands sustainability reporting requirements, replacing the Non-Financial Reporting Directive (NFRD). It introduces double materiality, requiring companies to assess both how sustainability factors impact their financial health and how their operations affect society and the environment. It also mandates third-party assurance, ensuring ESG data is as robust as financial reporting.

Why does the CSRD matter?

Sustainability reporting is now a regulatory requirement with implications for:

• Regulatory Compliance – Avoiding penalties and ensuring legal adherence.
• Investor Confidence – Meeting expectations for transparent ESG disclosures.
• Risk Management – Identifying sustainability-related risks and mitigating financial exposure.
• Competitive Advantage – Strengthening brand reputation and stakeholder trust.
• Access to Green Finance – Aligning with the EU Taxonomy and sustainable investment criteria.

Key Changes Under the Omnibus Regulation

The Omnibus introduces several refinements to the CSRD, including:

1. Extended Reporting Deadlines for Certain Companies
   • The Omnibus grants additional flexibility for non-EU companies and small listed entities, allowing more time to align with reporting requirements. Some compliance deadlines have been extended to reduce the immediate administrative burden.
2. Updated CSRD Scope and Thresholds
   • The employee threshold for large undertakings has been raised from 250 employees to 1,000 employees.
   • The financial thresholds remain unchanged at €50 million in net turnover or €25 million in balance sheet total.
   • For non-EU parent companies, the turnover threshold has increased from €150 million to €450 million, significantly reducing the number of non-EU firms required to report.
3. Adjustments to CSRD Rollout Timeline
   • The implementation schedule has been postponed, providing companies with additional preparation time. The revised rollout timeline is:

4. Clarifications on Assurance Requirements
   • Assurance obligations have been phased more gradually, with clearer guidelines on audit scope. While limited assurance still begins as planned, specific verification standards have been refined to align with existing EU audit regulations.
5. Streamlined Reporting for SMEs
   • Small and medium-sized enterprises (SMEs) under a simplified framework have greater flexibility, with an optional extension on compliance. The Omnibus has refined requirements to ensure proportional reporting, reducing unnecessary complexity for smaller entities.
6. Adjustments to European Sustainability Reporting Standards (ESRS)
   • The Omnibus modifies some ESRS obligations, particularly regarding sector-specific reporting. The phase-in period has been clarified, and certain disclosure requirements have been adjusted to avoid duplication with existing regulatory frameworks.
7. Updated Digital Tagging Requirements
   • While digital tagging using XBRL remains a core requirement, specific exemptions and refinements have been introduced to ease the transition for companies facing technical implementation challenges.

Next steps for businesses

With the Omnibus updates, companies should:

• Assess Eligibility – Determine if they meet the revised thresholds for reporting obligations.
• Review New Timelines – Identify how extensions or phase-ins apply to their business.
• Conduct a Double Materiality Assessment – Ensure compliance with ESRS updates.
• Strengthen ESG Data Systems – Prepare for third-party assurance and digital tagging.
• Engage Stakeholders – Work with investors, regulators, and supply chain partners.
• Align with Existing Frameworks – Leverage TCFD, ISSB, and EU Taxonomy to streamline reporting efforts.

Final thoughts

The Omnibus Regulation has refined the CSRD, offering greater clarity and phased compliance while maintaining the directive’s core objectives. Businesses should take advantage of these refinements to ensure a strategic, efficient, and compliant approach to sustainability reporting. By acting now, organisations can future-proof their ESG reporting while minimising regulatory risks.