Updates on the Omnibus Initiative and Upcoming ESG Obligations
Status as of June 2025
The Omnibus Package at a Glance
On February 26, 2025, the European Commission presented the so-called Omnibus Package – a comprehensive set of measures aimed at delaying, simplifying, and specifically adjusting sustainability reporting obligations. We introduced the first key points in our March update. Since then, directives have been adopted, decisions made, and timelines clarified – especially with regard to medium-sized enterprises. This article provides a current overview of the most important developments.
Understanding the latest developments around the first Omnibus Package requires distinguishing the draft amending directives it contains. Important: Each draft triggers its own legislative procedure and addresses different areas of ESG regulation:
1. Draft Amending Directive COM(2025) 80
- Known as the “Stop-the-Clock” Directive
- Regulates the deferral of application obligations for:
- Corporate Sustainability Reporting Directive (CSRD)
- EU Taxonomy
- Corporate Sustainability Due Diligence Directive (CSDDD)
- Already adopted as Directive (EU) 2025/794 on April 16, 2025
2. Draft Amending Directive COM(2025) 81
- Concerns substantive adjustments to sustainability reporting and due diligence requirements
- Includes, among others, proposals to raise reporting thresholds
- Currently in trilogue negotiations (as of June 2025)
3. Draft Amending Directive COM(2025) 87
- Addresses the simplification and strengthening of the Carbon Border Adjustment Mechanism (CBAM)
- Currently in the legislative process
Important: ESG reporting obligations under CSRD, EU Taxonomy, and CSDDD are mainly addressed in Drafts 80 and 81. These directives are negotiated independently. This means, for example, that the already adopted delay under Directive 80 will also affect companies that may no longer be subject to reporting obligations under Directive 81 (e.g., listed SMEs). Only the final combination of both directives will determine exactly which companies will be required to report and when.
“Stop the Clock” – Postponing the Initial CSRD Application
With Directive (EU) 2025/794, adopted on April 16, 2025, the EU Commission is postponing the introduction of the CSRD reporting obligation for several company categories:
- Wave 2: Start postponed from 2025 to 2027
- Wave 3: Start postponed from 2026 to 2028
- CSDDD: Due diligence obligations for companies with >5,000 employees and €1.5 billion in revenue postponed from 2027 to 2028
For Wave 1 companies (large listed entities), a “Quick Fix” is in preparation to temporarily suspend specific reporting requirements. A delegated act is expected to be published by summer 2025.
| Wave | Company Type | Original Start | New Start (Omnibus) |
| 1 | Listed companies with >500 employees | 2024 (reporting 2025) | Unchanged (possible “Quick Fix”) |
| 2 | Large unlisted companies with >250 employees | 2026 | 2027 |
| 3 | Listed SMEs | 2027 | 2028 |
Adjustments to the CSRD Scope of Application
The draft amending directive COM(2025) 81 is currently in trilogue. Central to this is the proposed increase in thresholds:
The Commission’s proposal from February 26, 2025, suggests raising the CSRD threshold to companies with more than 1,000 employees, potentially removing about 80% of previously covered companies from the scope.
Alternative thresholds are also under discussion (e.g., 500, 3,000, or 5,000 employees) as well as a voluntary reporting standard for smaller companies – the so-called VSME Standard (Voluntary Sustainability Reporting for Micro-Entities).
Even companies not directly subject to CSRD reporting requirements are affected. In practice, more and more large companies in the supply chain are demanding comprehensive sustainability data from their suppliers and partners. These increasing demands come from customers, investors, and other stakeholders who prioritize ESG in decision-making. This creates a "trickle-down effect", pushing smaller companies to build their own sustainability processes and reporting structures to remain competitive and maintain business relationships.
Content Adjustments to CSRD and ESRS
The revision of the European Sustainability Reporting Standards (ESRS) aims to simplify and reduce burdens – especially for SMEs:
- Reduction of mandatory data points
- Clarification of key definitions
- Improved structure and clarity
- Stronger alignment with global standards
The EU Commission mandated EFRAG on March 27, 2025, to revise the standards. The roadmap is ambitious:
- July 2025: Publication of initial drafts (“Exposure Drafts”)
- Aug./Sep. 2025: Public consultation (30–45 days)
- October 2025: Submission of final “Technical Advice” to the Commission
Parallel workshops and stakeholder interviews are ongoing to ensure practical relevance. Sector-specific standards have been temporarily postponed.
EU Taxonomy Regulation: Planned Changes
Significant changes are also coming for the EU Taxonomy Regulation. The aim is to simplify and make reporting requirements more practical:
- Going forward, reporting is required only for companies with >1,000 employees and
- either >€50 million turnover
- or >€25 million total assets
- Companies with >1,000 employees but <€450 million turnover can opt out via opt-in provision
Impact: Not all CSRD-reporting companies will automatically be subject to the Taxonomy – a break with previous logic.
| Change | Content |
| Materiality | No review for activities <10% of revenue/investments |
| DNSH Criteria | Simplified evidence, clearer REACH references |
| Reporting Templates | Only 27 instead of 78 data points, focus on relevance |
These changes are expected to be adopted in Q2 2025 and enter into force from 2026.
Updates to the CSDDD
The Corporate Sustainability Due Diligence Directive (CSDDD) has also been revised. The goal: reduce bureaucracy while maintaining stakeholder protection.
Key Adjustments:
- Stakeholder definition limited to directly affected parties (e.g., employees, residents)
- No mandatory consultations required for contract terminations
- Transition plans: No mandatory implementation – just descriptive documentation
- In-depth assessments only required if there are concrete risk indications
Practice Check: How Should Companies Respond to the Rising ESG Complexity?
Interview with Annette Dési, Head of Sustainability at DEKRA Certification GmbH “We’re all learning right now”
Question: Ms. Dési, how do you see the current state of the Omnibus Package and ESG regulation?
Annette Dési: Honestly – we’re in a transformation phase that’s overwhelming for many. And that’s totally human. What’s coming for companies is not just a new reporting set – it’s a cultural shift. The volume of regulation, constant updates, and new expectations cause uncertainty – even among experienced sustainability experts. The Omnibus Package brings short-term relief through delays, but long-term complexity won’t go away.
Question:Sounds like a lot of added pressure. How are companies coping?
Annette Dési: Many are overwhelmed – and understandably so. But the key is to take it step by step. Start with a realistic self-assessment: Where do we stand? What’s achievable? But companies must avoid the mistake of procrastinating. Sustainability reporting is becoming a core strategic task – those who invest now will benefit later.
Question: What does that mean in concrete terms for companies?
Annette Dési: Companies need to differentiate between “compliance” and “strategy.” Yes, it’s about deadlines and legal certainty – but also: how serious are we about sustainability? Many don’t even know where to start – and that’s where tools, standards, and advisory can help. But let’s not think software alone can fix it. Tools are important, but they must be used wisely – and they don’t replace human responsibility.
Question: How does this impact company culture?
Annette Dési: Sustainability is now a cross-functional task. Everyone must be involved – from procurement to finance, from leadership to operations. That’s a real cultural change. There’s uncertainty, even resistance. But if the process is transparent and inclusive, it can also motivate. Sustainability becomes part of the company’s identity, not just an obligation.
Question:What changes are happening to the regulatory framework – e.g., in the CSDDD?
Annette Dési: The CSDDD is a great example of moving toward substance over formalism. For example, in-depth risk assessments are only required if there are specific red flags. Consultations when ending contracts are no longer mandatory. And transition plans don’t need to be implemented, but they must be plausibly documented. This reduces bureaucracy – but means companies must take greater responsibility in assessing risks honestly.
Question:Are there other regulations shaping the big picture?
Annette Dési: Definitely. Sustainability reporting is merging with other domains. The voluntary carbon market is a good example. Offsetting is becoming more relevant – for companies and governments. At the same time, EU initiatives like the Green Claims Directive and EmpCo Directive now regulate how we communicate sustainability. Every claim will be scrutinized. It’s becoming stricter – but also more transparent, and that’s a good thing.
Question:There seems to be a lot going on right now. What’s been on your mind lately?
Annette Dési: Lately, I’ve been really focused on the so-called "Quick Fix" that the European Commission adopted on July 11, 2025. It’s a delegated act aimed at easing the pressure on companies that have to start reporting under the CSRD as of the 2024 financial year. What’s interesting is that it allows certain reporting requirements from four of the topic-specific ESRS standards – like those on biodiversity or workers in the value chain – to remain optional for now, even if those topics were identified as material. Another important part is that companies won’t be required to quantify the potential financial impacts of ESG risks until the end of 2026. I see this as a clear response to the pressure many “Wave 1” companies are facing – and, just as importantly, as a sign that we shouldn’t expect any new reporting obligations before the full ESRS review planned for 2026.
Question: What advice do you have for companies still trying to orient themselves?
Annette Dési: Start – even if you don’t know everything yet. No one has the perfect solution. Know your starting point, set realistic goals, and communicate openly. Sustainability is a journey, not a sprint. And stay in dialogue – with advisors, peers, and employees. Things are evolving quickly – but that also means: those who invest in knowledge, values, and collaboration today will be more resilient tomorrow.
Conclusion: What is the Bottom Line?
Annette Dési: We are all learning right now. No one can say what the perfect ESG setup looks like – not yet. But one thing is certain: if you take sustainability seriously, you can’t rely solely on tools or deadlines. You need to lead with mindset, transparency, and a willingness to learn. And that’s not a weakness – it’s a real strength. This time is challenging, but it also offers a tremendous opportunity for transformation – for companies, for entire industries, and for our society.