Omnibus package: EU launches trilogue negotiations

In future, reporting requirements are to be limited to large companies and the complexity of reporting reduced. Trilogue negotiations between the European Parliament, the Council of the EU, and the European Commission will begin on November 18, 2025. The aim is to reach agreement on the directive and complete the legislative process by the end of 2025.

What has happened since February 2025?

In February 2025, the EU Commission presented proposals to postpone and reduce the scope of sustainability reporting requirements and the associated burden on companies.

Back in April 2025, the proposals contained in the “Stop the Clock” Directive (Directive (EU) 2025/794) were implemented, postponing the reporting requirements for large companies under accounting law and for listed SMEs by two years.

In July 2025, the Delegated Act implementing reporting simplifications under the EU Taxonomy Regulation was adopted by the EU Commission. Significant changes include, for example, the introduction of a financial materiality threshold for reporting and a postponement of reporting on key figures for financial companies, such as the green asset ratio. The EU Council and Parliament can still raise objections to the Delegated Regulation during the so-called “scrutiny period” until January 5, 2026.

In mid-November 2025, the EU published the so-called Quick Fix Regulation (Regulation (EU) 2025/1416) in the Official Journal, thereby regulating important simplifications for companies that have been required to report under the CSRD since 2024. As an EU regulation, the Quick Fix applies immediately, does not require national implementation, and is therefore already applicable to financial years beginning on or after January 1, 2025.

The Commission is also seeking to further simplify ESRS Set 1 as part of Omnibus I. To this end, EFRAG has been tasked with presenting revised ESRS by the end of November 2025. These so-called ESRS 2.0 are then to be adopted in 2026 by means of a delegated act as a binding framework for sustainability reporting.

What are the trilogue negotiations about?

In the upcoming negotiations, agreement must now be reached on the various proposed amendments, which relate in particular to the following issues:

• Scope and postponement of the CSRD and CSDDD
• Sector-specific reporting standards for the CSRD
• Audits in connection with the CSRD

Scope and postponement of the CSRD and CSDDD

CSRD to date: two of three criteria exceeded > 250 employees, > €50 million in revenue, > €25 million in total assets.

The EU Commission is also proposing to raise the scope of the CSDDD to > 5,000 employees and > €1.5 billion in turnover, as well as a one-year postponement, unlike the EU Council and Parliament, which want to achieve a two-year postponement.

Sector-specific reporting standards for the CSRD

According to the EU Commission's proposal from February 2025, sector-specific standards would be completely abolished. However, voluntary sector-specific guidelines are conceivable, at least from the EU Parliament's point of view, and have not been completely ruled out by the EU Council either.

Audit in connection with the CSRD

Under the Corporate Sustainability Reporting Directive (CSRD), an increase in the level of assurance from “limited” to “reasonable” assurance had originally been planned starting in 2028. According to the current proposals, however, the audit is expected to remain at the level of limited assurance. Nevertheless, there is still no final agreement as to whether a separate auditing standard is required or whether guidelines for the audit should be issued.

While the Council of the European Union had already published its positions on the European Commission’s proposed amendments in June 2025, the European Parliament also agreed on its position on November 13, 2025.

Consequently, the European Commission, the Council, and the Parliament have each defined their positions for the start of the trilogue negotiations. The objective of the trilogue is to reach agreement on the positions that still differ. The agreement is expected to be reached by the end of 2025.

What does this mean for companies in Germany?

Germany remains subject to infringement proceedings for failing to transpose the CSRD into national law. The most recent draft bill presented by the German federal government already incorporates the extension of the scope of application to companies with 1,000 employees, as proposed by the European Commission. Germany is therefore under pressure to eliminate the unequal competitive conditions in relation to the European environment resulting from the non-implementation.

The scope of the obligations therefore remains unclear, particularly for capital market-oriented companies that would already be required under the CSRD to prepare sustainability reports in accordance with the ESRS, including an audit. Until the final adoption of the legislation, it remains uncertain whether the implementation will still occur and which thresholds will ultimately be included in the implementing law. 

For the vast majority of companies subject to reporting requirements, the timeline of the “scrutiny period” in early January 2026 concerning the EU Taxonomy also presents challenges and raises the question: “Are companies permitted – or not permitted – to make use of the simplifications for the 2025 financial year?”

Both issues create significant legal uncertainty for affected companies and require preparation for various possible scenarios as well as an assessment of risks and probabilities.