Following the recommendations made in the Draghi report and the subsequent review by the EU Commission on how it can strengthen the EU’s competitiveness, we now have concrete proposals in the form of Omnibus I and II (together, the ‘Omnibus’).  

The Omnibus package includes amendments to the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), the Carbon Adjustment Mechanism (CBAM), and the InvestEu Regulation. The package is accompanied by a draft Taxonomy Delegated Act for public consultation.

The first omnibus package (Omnibus I) would have a significant impact on the CSRD if adopted in its current form. The proposed changes to the Directive can be summarised as follows: 

• Reduction of scope – Reporting requirements to only apply to large undertakings with more than 1,000 employees and either a turnover above EUR 50 million or a balance sheet total above EUR 25 million.  

• Postponement of reporting – Reporting requirements for large companies and listed SMEs to be postponed by two years. 

• European Sustainability Reporting standards (‘ESRS’) – ESRS to be revised, with the aim of substantially reducing the number of data points. 

• Value chain cap – The value chain cap will extend to protect all undertakings with less than 1,000 employees from excessive sustainability information requests (following the changes above). The information to be provided will also be limited to a new set of voluntary sustainability reporting standards (known as the VSME).  

• Other – Deletion of the empowerment for the Commission to adopt sector-specific standards and removal of the possibility for the Commission to propose moving from a limited assurance requirement to a reasonable assurance requirement. 

The legislative proposals will now be submitted to the European Parliament and the Council for their consideration and adoption. 

There is a saying that when it comes to buses, you wait ages for one, and then two come along at once. It seems that the same applies to omnibuses.  

There has been speculation and discussions for months about potential changes to the EU’s sustainability framework: we now have two Omnibus packages. As explored above, these are expected to have a significant impact on the scope of the CSRD. We will keep a watching brief on how they progress, but for the time being, the current CSRD framework still applies.