Omnibus: EU Commission wants to simplify rules for sustainability reporting

On 26 February 2025, the European Commission presented its proposals for simplification in the area of sustainability and EU investments. The omnibus package includes changes to sustainability reporting in accordance with the CSRD and Article 8 of the Taxonomy Regulation.

With this initiative, the Commission aims to reduce the complexity of EU requirements for all companies, especially SMEs and small mid-caps, by up to 35%. The key points of ESG reporting:

• The sustainability reporting requirement will only apply to large companies with more than 1,000 employees and either an annual turnover of more than EUR 50 million or a balance sheet total of more than EUR 25 million. This means that around 80 per cent of companies will be excluded from the scope of the CSRD
• For companies that do not (or no longer) fall within the mandatory personal scope of the CSRD, the Commission is to issue a voluntary reporting standard based on the standard for SMEs (VSME). Information from companies in the value chain with up to 1,000 employees is to be limited to this standard.
• ESRS Set 1 is to be revised in order to significantly reduce the number of data points, clarify unclear provisions and improve consistency with other legislation.
• Sector-specific standards are to be dispensed with.
• The reporting obligations for SMEs that currently fall within the scope of the CSRD and are required to report from 2026 or 2027 are to be postponed by two years (until 2028).
• For companies that fall within the future personal scope of the CSRD (large companies with more than 1,000 employees) and have an annual net turnover of no more than EUR 450 million, the reporting obligation under Article 8 of the Taxonomy Regulation is to be cancelled. Instead, voluntary taxonomy reporting is proposed.

Important for companies: Despite the simplifications, affected companies should prepare for the new requirements at an early stage. Because even if deadlines have been postponed and reporting obligations reduced, the regulatory requirements remain high. A strategic approach is crucial in order to implement sustainability reporting efficiently and in compliance.