{"id":8210,"date":"2025-03-24T16:43:45","date_gmt":"2025-03-24T15:43:45","guid":{"rendered":"https:\/\/ibj.be\/news\/commission-launches-omnibus-i-package-to-relax-esg-rules\/"},"modified":"2025-03-24T16:43:45","modified_gmt":"2025-03-24T15:43:45","slug":"commission-launches-omnibus-i-package-to-relax-esg-rules","status":"publish","type":"post","link":"https:\/\/ibj.be\/en\/partnerblog\/commission-launches-omnibus-i-package-to-relax-esg-rules\/","title":{"rendered":"Commission launches Omnibus I package to relax ESG-rules"},"content":{"rendered":"\n

In February 2025, the European Commission introduced its first “Omnibus Package,” designed to simplify and reduce the administrative burdens related to sustainability reporting and due diligence directives. This package outlines significant amendments to both the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D). These amendments reflect the European Commission\u2019s commitment to maintaining sustainability objectives while reducing administrative burdens. By easing compliance requirements and refining reporting standards, the new framework aims to enhance business competitiveness while ensuring continued progress in environmental and social governance.<\/strong><\/p>\n\n\n\n

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  1. Proposed amendments for the Corporate Sustainability Reporting Directive (CSRD)<\/strong><\/li>\n<\/ol>\n\n\n\n

    A first adjustment under the Omnibus Package is that the ESG-reporting requirements of the CSRD will be postponed. Under the original schedule, the second wave of companies (the so-called \u201clarge companies\u201d) was set to report for the 2025 financial year, followed by the third wave (Listed SMEs, small and non-complex credit institutions, and captive insurance undertakings) in 2026. However, the proposal delays the reporting obligations for these two waves by two years<\/strong>, giving affected companies additional time to prepare for compliance. The scope of reporting companies under the new proposal has been revised.<\/p>\n\n\n\n

    Second, According to the current rules of the CSRD, eventually, reporting will be mandatory for large undertakings that meet the criteria of having at least 250 employees, a net turnover of \u20ac50 million, and a balance sheet total exceeding \u20ac25 million. Under the new proposal, reporting requirements will apply only to undertakings with more than 1,000 employees<\/strong> and either a net turnover of \u20ac50 million or a balance sheet total above \u20ac25 million. This adjustment aims to limit reporting obligations for smaller and midsize companies, while ensuring that larger companies remain accountable. This adjustment is estimated to exclude 80% of the companies falling under the current scope of the CSRD. Small and medium-sized enterprises (SMEs) are now exempt from mandatory CSRD reporting, although voluntary reporting standards will be developed for those choosing to disclose sustainability information.<\/p>\n\n\n\n

    Third, according to the proposal, Non-EU companies<\/strong> are required to have an annual turnover exceeding \u20ac450 million<\/strong> in the EU (currently this is \u20ac150 million) and must meet at least one of the following criteria: either operate a large subsidiary that meets the EU company criteria or maintain a branch in the EU with an annual net turnover exceeding \u20ac50 million (currently this is \u20ac40 million euro). Therefore, the CSRD will affect less non-EU companies.<\/p>\n\n\n\n

    Fourth, the reporting requirements will be simplified<\/strong>. The number of mandatory data points in the European Sustainability Reporting Standards (ESRS) will be reduced to streamline obligations. The Commission will adopt a delegated act to revise and simplify the existing sustainability reporting standards (ESRS). The proposal will also delete the empowerment for the Commission to adopt sector-specific standards.<\/p>\n\n\n\n

    Fifth, companies are restricted from requesting sustainability information from business partners in their value chain with fewer than 1,000 employees<\/strong>, except in specific circumstances. This measure aims to alleviate the reporting burden on smaller entities within the value chain.<\/p>\n\n\n\n

    The CSRD had to be transposed by the EU Member States by 6 July 2024, so most EU Member States already prescribe the current rules of the CSRD in their national law. If the proposal is approved by the Council and the EU Parliament, the EU Member States will also still need to adapt their national rules. The question now is what large companies should do, especially those who are expected to start submitting their first report in 2026. As the EU legislative train is usually a slow one, it will take time before the possible adjustments enter into force. It is recommended to closely monitor the evolution and the position of the national authorities. Putting your preparatory work on hold might work out well, but as there is not much clarity on the timeline yet, this might be a dangerous gamble. <\/p>\n\n\n\n

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    1. Proposed amendments for the Corporate Sustainability Due Diligence Directive (CS3D)<\/strong><\/li>\n<\/ol>\n\n\n\n

      According to the proposal for the Corporate Sustainability Due Diligence Directive (CS3D or CSDDD), the deadline for member states to transpose <\/strong>the directive into national law will be extended by one year to 2027<\/strong>, with the initial phase of due diligence requirements<\/strong> for the largest companies now set to 2028<\/strong> instead of 2027. Due diligence assessments will now occur only every five years<\/strong> instead of annually, with a focus on high-risk areas within a company\u2019s own operations, subsidiaries, and direct business partners<\/strong>. The requirement to terminate business relationships<\/strong> as a last resort will be removed. Information requests to SMEs and small midcap companies are now limited to the CSRD voluntary sustainability reporting standards, minimizing undue pressure on smaller entities.<\/p>\n\n\n\n

      In addition, Civil liability rules<\/strong> will defer to national laws, eliminating EU-wide harmonization and representative action requirements<\/strong> for trade unions and NGOs. Finally, climate transition plans<\/strong> will be aligned with the Corporate Sustainability Reporting Directive (CSRD) to ensure consistency across regulations.<\/p>\n\n\n\n

      Also in this case, the proposal of the Commission does not guarantee an approval by the Council and the Parliament. However, as the CS3D only has to be transposed by 2026 (or 2027, see above), there is more time for companies to wait and see how the legislative situation evolves before they undertake action.<\/p>\n\n\n\n

      Sources:<\/p>\n\n\n\n