Omnibus: State of play on the proposals under discussion

In recent months, the Omnibus legislative package has been the subject of intense negotiations within the European Union, with the clear aim of simplifying and adjusting regulatory obligations on sustainability.

Within this package, the Stop-the-Clock directive was approved in April 2025, suspending for two years the reporting obligations initially scheduled to start in 2025 under the CSRD (Corporate Sustainability Reporting Directive). This suspension responds to the European Commission’s need to gain time to more carefully assess and adopt the measures currently under debate.

Since then, several proposals have been discussed that indicate possible pathways for the evolution of the EU’s sustainability regulatory framework, among which we highlight:

Regulatory thresholds

In June 2025, European Parliament rapporteur Jörgen Warborn proposed significantly raising the CSRD applicability thresholds, arguing that only companies with more than 3,000 employees and €450 million in turnover should be covered. The proposal, however, raised concerns about the risk of distorting the directive’s scope and undermining the coherence of the EU reporting framework.

By contrast, the Council of the European Union adopted a more pragmatic stance. For the CSRD, it set a threshold of 1,000 employees and maintained the level of €450 million in turnover, seeking to preserve regulatory ambition while acknowledging calls for simplification. In the case of the CSDDD (Corporate Sustainability Due Diligence Directive), the Council set a threshold of 5,000 employees and €1.5 billion in revenue, with entry into force postponed to July 2028.

Simplifying the European Sustainability Reporting Standards (ESRS)

In response to the 20 June progress report from EFRAG, the European Commission, in a letter signed by Maria Luís Albuquerque, set clear guidelines for revising the ESRS, providing direction ahead of the public consultation, including:

No addition of new mandatory data points or conversion of voluntary disclosures into mandatory ones without robust justification.
Reducing reporting volume by focusing on the most relevant and strategic disclosures.
Making the wording clearer, more concise, and free of redundancies.
Avoiding multiple layers of obligation and ambiguity.
Aligning ESRS with international standards such as ISSB (IFRS S1 and S2).

It is worth noting that the deadline for EFRAG’s final technical advice has been extended to November 2025, allowing more detailed analysis of feedback from the public consultation and greater maturity in decision-making.

Sharp reduction in ESRS data points

The technical revision of the ESRS, led by EFRAG, removed around 66% of mandatory data points, with an almost complete reduction in voluntary points and a more than 50% removal of items previously classified as mandatory.

Among the main proposed changes are:

Simplifying the double materiality assessment, focusing on decision-useful information.
Clarifying the boundaries of the value chain and of GHG emissions.
A more flexible structure, adaptable to each company’s reality and size, eliminating redundancies.
Clearer distinction between mandatory and optional requirements.
Partial alignment with international standards IFRS S1 and S2.

A meeting is scheduled for 25 July 2025 between members of the EFRAG Sustainability Reporting Technical Expert Group (EFRAG SR TEG) and the Single Resolution Board (SRB) to approve the Exposure Drafts resulting from this review.

More flexibility in applying the EU Taxonomy

The EU Taxonomy is also being reviewed, with proposals aimed at simplifying its application without diluting environmental objectives:

Exemption from assessing eligibility or alignment for financial activities deemed non-material — i.e., representing less than 10% of turnover, CapEx or OpEx.
Banks will have simpler rules for reporting the Green Asset Ratio.
Significant reduction in the number of required data points: -64% for non-financial companies and -89% for financial companies.
Simplification of assessment criteria related to the “do no significant harm” principle, particularly regarding pollution and the use of chemicals.

These proposals are currently under review by the European Parliament and the Council and, once approved, are expected to apply already to the 2025 financial year.

Deferrals for Wave 1 companies

On 11 July 2025, the European Commission (European Commission) adopted a delegated act, informally dubbed the “Quick Fix”, introducing significant deferrals to certain ESRS reporting requirements for Wave 1 companies — those initially required to report already in 2024.

The main deferrals include:

Companies with ≤ 750 employees may, until 2026, omit disclosure of Scope 3 emissions, as well as information required by ESRS E4 (biodiversity and ecosystems) and the social standards (ESRS S1 to S4).
Companies with > 750 employees may also defer, until 2026, full reporting of ESRS E4, ESRS S2 (workers in the value chain), ESRS S3 (affected communities) and ESRS S4 (consumers and end-users). They are also allowed to omit several detailed disclosures under ESRS S1 (own workforce), including data on non-employees, training, collective bargaining, and health and safety.

Conclusion: Sustainability in transition, leadership in the making

Developments around the Omnibus reflect a shifting landscape marked by an effort to balance regulatory relief and the EU’s ambition to lead on sustainability.

For companies, this is a decisive moment. Even without final decisions, it is essential to anticipate scenarios, assess the potential impact of the measures under discussion, and strengthen internal capacity — from data systems to sustainability governance. Those who prepare now will be at an advantage.

Regardless of the legislative outcome, investing today in information quality, strategic integration of ESG criteria, and robust processes will not only enable compliance with future legal requirements but also meet the growing expectations of investors and clients.

Leadership will belong to those who can turn sustainability into value — before compliance becomes an emergency.

References

European Commission (2025). European Sustainability Reporting Standards “Quick-Fix” Delegated Act of 11 July 2025. Link
EFRAG (2025). Draft Amended ESRS Exposure Draft UNAPPROVED Working documents. Link
European Commission (2025). Commission Delegated Regulation (EU) of 4.7.2025 Amending Commission Delegated Regulation (EU) 2021/2178 and Commission Delegated Regulations (EU) 2021/2139 and (EU) 2023/2486. Link
European Commission (2025). European Commission letter to EFRAG on the ESRS Review. Link
European Parliament (2025). Draft Report on the Proposal for a Directive of the European Parliament and of the Council Amending Directives 2006/43/EC, 2013/34/EU, (EU) 2022/2464 and (EU) 2024/1760. Link