Omnibus Package: Fewer Obligations, More Flexibility – How Companies Can Benefit from the EU’s Policy Shift

With the conclusion of the trilogue negotiations on the Omnibus I package on December 16, 2025, the European Union has implemented a strategic shift in sustainability regulation. The new rules on the CSRD, CSDDD, and the EU Taxonomy lower thresholds, simplify reporting standards, and significantly reduce audit and disclosure requirements. The aim is to provide noticeable relief for companies – without losing sight of the strategic importance of sustainable corporate governance. Companies should now take action to set the right course and adapt their internal processes to the simplified standards. 

Key changes at a glance: fewer obligations, higher thresholds 

The Omnibus I package introduces far-reaching relief for European sustainability regulation: higher thresholds, simplified reporting standards, and reduced audit requirements. Both the CSRD and the CSDDD significantly narrow their scope of application, while streamlined ESRS, simplifications within the EU Taxonomy, and a voluntary standard for SMEs open up new pragmatic approaches. The key changes in detail: 

CSRD: Adjustment of size categories 

The most important change: In the future, only companies with more than 1,000 employees and more than EUR 450 million in revenue will fall within the scope of the Corporate Sustainability Reporting Directive (CSRD). These thresholds apply both to individual entities and to parent companies of corporate groups. 

Companies previously required to prepare a non-financial (consolidated) statement and not exceeding the new thresholds may be exempted from reporting from the 2025 financial year by national legislators. This primarily affects capital market-oriented companies below the new thresholds. 

ESRS: Reduced requirements 

Where companies fall within the scope of the CSRD, reporting must comply with the European Sustainability Reporting Standards (ESRS). As a result of the Omnibus I package, the ESRS will be significantly streamlined and disclosure requirements reduced. The originally planned sector-specific standards will be eliminated. 

Furthermore, sustainability reporting will not be subject to reasonable assurance in the coming years. As a result, there will be no alignment with the level of assurance applicable to financial statement audits. 

Simplified standard for sustainability reporting 

For all companies not directly subject to the CSRD, the Voluntary SME Standard (VSME) provides a simplified, practice-oriented framework for sustainability reporting. In addition, the so-called “Value Chain Cap” introduces a limitation on information requests by companies directly subject to the CSRD, based on the disclosure requirements of the VSME. 

CSDDD: Adjustment of thresholds 

The size thresholds under the Corporate Sustainability Due Diligence Directive (CSDDD), the European Supply Chain Act, will be adjusted as well. In the future, only companies with more than 5,000 employees and revenues exceeding EUR 1.5 billion will fall within its scope. 

Compared to the German Supply Chain Act (LkSG), which currently applies to companies with at least 1,000 employees and imposes regulatory requirements along the upstream and downstream supply chain, this represents a significant increase in the thresholds. 

EU Taxonomy Regulation: Simplifications and reduction of data points 

At the beginning of the year, further simplifications were introduced to the EU Taxonomy Regulation. Among other things, a materiality assessment has been newly introduced. In addition, the reporting templates have been revised, resulting in a reduction of the previously extensive data points. 

Timeline and effective date: What happens next 

The results of the trilogue negotiations on the CSRD and CSDDD must now be published in the Official Journal of the EU by means of an amending directive. The changes will generally enter into force 20 days thereafter and must be transposed into national law by the Member States within 12 months. An exception applies to the amendments relating to the CSDDD, for which a different transposition deadline has been set until July 26, 2028. The exemptions regarding the EU Taxonomy Regulation are already in effect immediately.  

CSRD, EU Taxonomy and CSDDD: When and to whom the obligations apply 

The obligation to prepare sustainability reports under the CSRD applies already in the financial year in which the new thresholds are exceeded for the first time. Disclosure requirements under Article 8 of the EU Taxonomy Regulation generally apply in addition to companies that are subject to sustainability reporting under the CSRD. 

While the national requirements under the German Supply Chain Act (LkSG) have already been in effect since January 1, 2023, the due diligence obligations under the CSDDD are expected to apply to affected companies only from July 26, 2029. 

Key timing considerations taking into account the trilogue agreement and national implementation in 2026