Life after the EU Omnibus: Taking a no regrets approach to CSRD adoption

The overall goal of the Omnibus is to reduce reporting burdens, particularly for smaller and mid-sized entities, and increase efficiency in sustainability reporting. However, many organisations are already far along in their implementation programmes and are unsure of what to do next.

Recognising that good sustainability processes will always support environmental initiatives, boost competition and improve risk management, it’s important to adopt a ‘no regrets’ approach. Pared down elements of the Omnibus can still be seen as good practice, if no longer a regulatory necessity for your organisation.

The changes at a glance

The changes focus on three regulations, namely the Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy, and the Corporate Sustainability Due Diligence Directive (CSDDD). 

Changes to the former will have the biggest impact, with a significant decrease in the number of organisations in scope, as well as a two-year delay in implementation for wave 2 organisations.

Key changes to the scope of the CSRD

The changes to the other two regulations are less extensive, but could still have a significant impact on organisations:

The EU Taxonomy

The Taxonomy will now be voluntary for companies with less than EUR 450 million in revenue but introduces a financial materiality threshold for reporting. There are also fewer required reporting templates and fewer data points for inclusion, with changes to some ratios for financial institutions (such as the Green Asset Ratio). 

The CSDDD

Large companies will have an additional year for implementation, with the deadline pushed back to July 2028 for wave 1 organisations. The directive itself has also been simplified to focus due diligence requirements on direct business partners. It also reduces the reporting burden for smaller and mid-sized organisations by limiting the sustainability information that can be requested by larger entities.

The impact of these proposals will depend on the size of your organisation, and how far you ’ve progressed on your sustainability journey. While some regulatory requirements may fall away, it’s important to continue CSRD implementation on a ‘no-regrets’ basis, while closely monitoring developments and being prepared to adjust plans as necessary.

It’s early days

Simplified reporting requirements will alleviate pressure on many smaller and mid-sized entities, which may have struggled to meet CSRD requirements. Delayed timelines will also give organisations space to embed the right processes and controls to support robust sustainability reporting, in a way that’s cost-effective and that works alongside broader sustainability initiatives.

However, the Omnibus is still at the proposal stage and will need to be debated and approved by EU member states. It would be bold to assume the proposals won’t change at all – so you may be out of scope under the current proposals, but this may not be the final position. It’s also far from certain how long it will take to adopt the final regulation.

It’s important not to lose sight of the legislative requirement in individual member states. Many member states have already transposed the existing EU sustainability reporting directives and its uncertain whether they’ll all change their domestic laws before your compliance deadline.

Maximising the value of your work to date

While there are clear benefits in the Omnibus, many organisations are uncertain about how to move forward, knowing that they may ultimately fall out of scope of the CSRD. But it’s important to note that regulatory compliance isn’t in itself an end goal, and work to improve sustainability practices and embed effective risk management is never work wasted.  

Wave 1 reporters

Most wave 1 reporters will remain in scope once the Omnibus is finalised. They have already adopted the CSRD and invested significant time and resources into preparing their first sustainability statements, which are due for submission from 1 Janu ary 2025 for fiscal year 2024. Many have also begun to integrate the governance and outputs of their Double Materiality Assessment (DMA) into strategy, risk management and policy reviews.

Wave 2 reporters

Wave 2 reporters were originally due to report from 1 January 2026 for fiscal year 2025 and are at various stages of CSRD implementation. Many organisations are part-way through, or even at an advanced stage of their preparations. Accordingly, organisations have already invested significant resources, training and management time.

If you’ve started your DMA process, keep going. The ability to effectively mitigate risks depends on having good visibility over them, and it's difficult to capitalise on an opportunity if you don’t recognise it. While the motivation for conducting the exercise may have been driven by compliance; identifying material sustainability impacts, risks and opportunities can inform strategy, enhance risk management, and boost business resilience. 

Sustainability reporting: Your practical guide

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Key recommendations

Organisations that haven’t considered sustainability in a meaningful way, or who have yet to engage management in the conversations in the way that the CSRD requires, may ultimately be at a disadvantage compared to their competitors. As such, there’s still significant value in embedding the key principles of the directive. 

Adapt to your needs

The CSRD, CSDDD, and EU Taxonomy, are all platforms that provide strategic structure and can be approached from a transformational standpoint as well as a regulatory one. Legislation should be viewed as a means, not an end.

We know that increasing climate risks for organisations won’t disappear with a change in legislation, nor is investor sentiment for greater transparency and comparability of sustainability information likely to reduce. Similarly, mapping the value chain and plotting potential sustainability matters, impacts, risks and opportunities will always prove useful, bringing additional insight for improved risk management and strategic opportunities. The more tangible an organisation’s sustainability policies and goals are, the easier it will be to track milestones and progress, with more effective risk management practices.

Focus on the DMA

Many organisations have conducted or are conducting a DMA, which remains part of the Omnibus proposal, if in scope. However, the DMA is about so much more than regulatory compliance; it’s a strategic tool that can drive better decision making, resilience, and transparency. It enables management to focus on the most important sustainability-related risks and opportunities to the organisation; and identity the biggest sustainability impacts that the organisation can have on people and the environment.

Management are often too quick to overlook the opportunities that a DMA can identify, focusing attention instead on risk mitigation. In this uncertain regulatory environment, value creation and financial gains should be driving decision making as much, if not more, than perceived losses. As such, completing your DMA, even if you may ultimately fall out of scope of the CSRD has clear business benefits and is undoubtedly a no-regrets activity.

Prepare for assurance

Sustainability information has unique risks and differs from financial information in many ways, including challenges around data sources and the use of more qualitative measures. Good quality assurance is vital to help companies better understand these risks and reduce the potential for reporting inaccurate, incomplete, or misleading information. Risk-focused assurance can also assist companies to identify areas for improvement in their processes, controls and data, as well as evidence quality and availability.

Organisations will need to gain assurance over their full sustainability report. If you haven’t had any assurance before, you can use this additional time to gain targeted assurance over specific sustainability information. If you have already started to benefit from assurance, you should consider widening its scope to move you closer to what will be required under the CSRD regulations.

Keep a close eye on local transposition rulings

It’s worth remembering that the CSRD has already been transposed into national laws in many EU member states. That means that until member states change their regulation, organisations are still legally required to comply with the CSRD. There will also be adjustments to the Omnibus proposals as they progress through the European Parliament.

It would be prudent to continue to prepare until there’s greater visibility on the new landscape. However, it’s important to develop a ‘no regrets’ plan to maximise the value of all related work to support broader strategic goals, should your compliance obligations fall away.

For further information on the Omnibus regulation, contact Paul Holland.