The Omnibus Proposal: Major Changes to CSRD, CSDDD, and EU Taxonomy – What Does It Mean for Boards?
On 26 February, the European Commission presented its Omnibus proposal, introducing significant changes to key sustainability regulations, including the CSRD (Corporate Sustainability Reporting Directive), CSDDD (Corporate Sustainability Due Diligence Directive), and the EU Taxonomy.
It is important to note that this is only a proposal and must go through further discussions and approvals before becoming law. However, if implemented, these changes could significantly impact corporate sustainability reporting and due diligence obligations.
At the same time, the EU is ramping up its Clean Industrial Deal, a strategy to strengthen European competitiveness by accelerating green industrial innovation. This means that while reporting burdens may be reduced, sustainability and green transformation remain critical for businesses aiming to stay competitive in the EU market.
For boards, this means less administrative burden but no reduction in strategic responsibility. Regardless of regulatory changes, companies must stay committed to long-term sustainability goals, risk management, and innovation to align with EU industrial and financial priorities.
Key Takeaways from the Omnibus Proposal
CSRD – Corporate Sustainability Reporting
Smaller scope – 80% of companies removed from CSRD requirements. Only the largest companies remain within scope (more than 1,000 employees and either a turnover above €50 million or a balance sheet total above €25 million).
Extended deadlines – Reporting obligations postponed by two years for some companies (until 2028).
Simplified reporting – The European Sustainability Reporting Standards (ESRS) will be revised to reduce the reporting burden on smaller companies in the value chain.
CSDDD – Corporate Sustainability Due Diligence
Reduced burden on businesses – Due diligence requirements will focus primarily on direct business partners.
Longer assessment intervals – Business partner assessments required only every five years instead of annually.
Increased harmonization – Greater consistency in due diligence rules across the EU.
Limiting trickle-down effects – Companies will face restrictions on the amount of information they can request from smaller suppliers and business partners.
Extended compliance deadlines – Compliance requirements postponed by one year (until 2028).
Civil law liability deferred to national laws – The EU will not impose harmonized civil liability rules but leave this to individual member states.
EU Taxonomy – Sustainable Investments
Limited reporting scope – Mandatory reporting obligations restricted to the largest companies, aligning with CSDDD.
Materiality thresholds introduced – Reducing reporting complexity.
Simplified criteria – The most complex “Do No Significant Harm” criteria will be streamlined.
What Does This Mean for Boards?
While the proposal aims to ease administrative complexity, it does not change the fact that sustainability remains a key strategic issue for businesses. Boards must ensure that their companies continue to integrate sustainability into their governance, risk management, and long-term planning.
At the same time, the Clean Industrial Deal emphasizes EU competitiveness in green industries, meaning that companies focusing on sustainability and innovation will benefit from new financial incentives, policy support, and market positioning.
Boards Should Focus On:
Strategy remains key – Regulatory requirements may change, but investors, customers, and stakeholders continue to demand strong sustainability commitments.
Maintaining transparency – Even with reduced reporting obligations, businesses must clearly communicate their sustainability efforts.
Risk management & due diligence – Boards must ensure continued responsible supply chain management and risk mitigation, even as reporting requirements are simplified.
Trendspotting & long-term thinking – The EU’s Clean Industrial Deal presents opportunities for companies that prioritize green investments, innovation, and decarbonization.
Conclusion – Be Prepared for Change
While the Omnibus proposal is not yet law, it signals a shift in EU sustainability regulations. At the same time, the Clean Industrial Deal is reinforcing the EU’s commitment to green innovation and competitiveness.
Boards should stay informed, anticipate future developments, and ensure sustainability remains a core part of their governance strategy. The companies that act proactively will be best positioned to adapt to new regulatory frameworks while leveraging opportunities in the green economy.
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