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While the EU's Omnibus Simplification Package delays CSRD reporting requirements for SMEs, it doesn't eliminate the need for sustainability reporting. In this article we'll help you understand the Omnibus Simplification package, what it entails, and why reporting is still crucial for businesses of all sizes.
In February 2025, the EU rolled out the Omnibus Simplification Package, which got a lot of attention across industries. The goal of this package is to make things easier for smaller businesses by simplifying some rules in the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy. But the delay in compliance deadlines has raised some important questions about corporate responsibility.
One big concern? Some people are mistakenly thinking the delay means companies can skip out on sustainability reporting altogether. That’s not the case, especially for businesses that work with larger companies. Even though the deadlines are pushed back, reporting is still required, and keeping accurate emissions data is crucial for long-term success and staying compliant with ever-changing ESG regulations.
In this blog, we’ll break down what the Omnibus package really means, clarify what it does and doesn’t change for sustainability reporting, and explain why accurate emissions data is still a must for businesses of all sizes.
| The Corporate Sustainability Reporting Directive (CSRD) - A set of regulations from the European Parliament aimed at increasing transparency and accountability among EU-based companies regarding their operations, focusing on environmental issues, diversity, and societal impact. | EU's Omnibus Simplification Package - Introduced in February 2025, this package simplifies sustainability regulations, especially for SMEs, by delaying compliance deadlines for the Corporate Sustainability Reporting Directive (CSRD). |
| The Corporate Sustainability Due Diligence Directive (CSDDD) - Though not fully implemented yet, the CSDDD is a EU law that requires large companies (+1,000 employees or €450 million in global turnover) to actively check their entire supply chain for human rights and environmental risks, set climate change plans and ensure compliance with sustainability goals. | The EU Taxonomy - Essentially, it’s a guide for sustainable investing. This system helps define which activities are genuinely environmentally sustainable, to help direct funds toward projects that align with the EU’s climate and environmental goals. |
Understanding the EU's Omnibus Simplification Package
The Omnibus Simplification Package, introduced by the European Commission, aims to simplify sustainability regulations such as the CSRD, the EU Taxonomy, and the Corporate Sustainability Due Diligence Directive (CSDDD). By focusing on reducing complexity, reducing the amount of affected companies, and streamlining reporting requirements and deadlines, the package offers significant administrative relief, particularly for small and medium-sized enterprises (SMEs).
For context, under the original CSRD framework, up to 50,000 companies across the EU would have had to adhere to stringent sustainability reporting standards by 2025. The Omnibus package delays these obligations for smaller enterprises and raises the thresholds for compliance. Now, reporting applies first to companies with over 1,000 employees and either €50 million in turnover or €25 million in assets, with smaller businesses becoming subject to such requirements at a later phase.
While this delay reduces short-term pressures for many businesses, failing to report or track emissions data could have significant long-term consequences.
How will the EU's Omnibus Package affect reporting timelines?
Following the adoption of the EU's Omnibus Simplification Package, the original reporting timelines for companies in the scope of the CSRD implementation timeline have undergone some adjustments. Below is a comparison of the original and revised reporting timelines:
| Company category and timeline | Original reporting start (CSRD) | Revised reporting start (Omnibus Proposal) |
|---|---|---|
| First Wave | ||
| Large Public Interest Entities (PIEs) and listed companies with more than 500 employees | Financial year starting on or after January 1, 2024 (reporting in 2025) | No change; reporting remains for FY2024 |
| Second Wave | ||
| Large companies meeting at least two of the following criteria: >250 employees, >€50 million turnover, >€25 million total assets | Financial year starting on or after January 1, 2025 (reporting in 2026) | Postponed to FY2027 (reporting in 2028) |
| Third Wave | ||
| Listed SMEs, small and non-complex credit institutions, and certain captive insurance undertakings | Financial year starting on or after January 1, 2026 (reporting in 2027) | Postponed to FY2028 (reporting in 2029) |
| Fourth Wave | ||
| Non-EU companies with significant EU operations (e.g., >€150 million EU turnover and at least one subsidiary or branch in the EU) | Financial year starting on or after January 1, 2028 (reporting in 2029) | No change; reporting remains for FY2028 |
The Omnibus package - what it does and doesn’t mean
What the Omnibus package does: |
What the Omnibus package doesn't: |
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Reduces immediate burden on SMEs: |
Eliminate reporting expectations: While SMEs may no longer be legally obligated to report, larger enterprises in the supply chain must still comply. This creates a “trickle-down” effect, where smaller suppliers and service providers need to deliver emissions data to larger partners for compliance purposes. Remove the long-term necessity for reporting: Sustainability reporting remains a significant priority within the EU. Delays offer breathing room but do not sideline the importance of sustainability practices or investments. Change the core principles of the regulations: The European Commission emphasizes that the core objectives of these regulations will remain unchanged - including for example, the principle of double materiality of the CSRD. This shows that while changes are being made, the essential regulations themselves are not being overhauled. The goal of the Omnibus Package is to simplify the existing laws without altering their substance. |
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Why reporting is still crucial for businessesWhether mandated or not, accurate emissions reporting plays a crucial role in modern business operations. Companies supporting larger partners—especially supply chain managers, service providers, and consultants—need streamlined emissions monitoring to remain competitive.
Here’s why accurate data is still paramount: 1. Meet demand from larger organisations: Large companies required to comply with CSRD will continue requesting ESG data from supply chain partners. Without it, they may look elsewhere for compliance-friendly providers. If your business relies on serving such clients, keeping track of emissions data is not optional—it’s a business necessity. |
Service providers need to step up
For service providers, such as supply chain partners or advisors working alongside large corporations, the implications are even more significant.
Adapting to supply chain requests
The “trickle-down” effect of ESG regulations is unavoidable. Even if smaller service providers evade mandatory reporting, their clients won’t. Ergo, large clients will continue requesting emissions data from their partners to ensure compliance across the supply chain. Service providers must adopt emissions reporting systems to retain and strengthen these business relationships.
Competitive differentiation
Accurate reporting sets service providers apart. Those prepared to deliver seamless, verified ESG data are more likely to secure larger contracts, building credibility within an increasingly sustainability-conscious market.
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Benefits of accurate reportingWhile the requirements may seem burdensome, the advantages of maintaining strong ESG reporting far outweigh the costs.
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Moving forward what should businesses do?
The Omnibus delay doesn’t negate the need for sustainability reporting; it gives businesses an opportunity to get ahead. Here’s how to approach reporting strategically, regardless of your organisation’s current obligations:
Invest in reporting tools
Adopt emissions monitoring and sustainability reporting systems that simplify data collection and enable seamless collaboration with supply chain partners.
Collaborate with partners
Engage with larger organisations in your network to understand their reporting demands and align your processes with their expectations.
Focus on long-term value
Approach sustainability reporting as a value-driven exercise rather than mere compliance. Highlighting your organization’s contributions to ESG goals can demonstrate leadership and innovation, which will make you stand out.
Prioritizing progress over compliance
The Omnibus Simplification Package marks a shift in EU policy but shouldn’t be misinterpreted as a relaxation of long-term ESG objectives. Businesses that prioritize emissions reporting today will position themselves as reliable, forward-thinking partners tomorrow.
To stay ahead of regulatory changes and optimize future ESG practices, begin aligning your emission tracking systems with industry standards. Effective action today ensures you remain competitive tomorrow, no matter how the regulatory landscape evolves.