The EU Omnibus Package – What do we know so far?

03 3月 2025

On 26 February 2025, the EU Commission published first drafts of its Sustainability Omnibus Package (as announced here, with a link to the legislative proposals here).

The Sustainability Omnibus Package has been anticipated for its promise to ease the regulatory burden on companies with the aim of promoting competitiveness — one of the key recommendations of the influential Draghi Report.

While the EU remains a global leader in sustainability regulation, the three key pillars of EU sustainability regulation — CSRD, CS3D, and EU Taxonomy — are highly technical, and many organisations have struggled with implementation. As a result, regulatory simplification has been a widely supported priority within the industry.

The Omnibus Package has been broadly welcomed for its proposed simplification but also creates uncertainty about the future of the EU's ambitious sustainability framework to which many companies have dedicated significant resources.

The key changes include the following:

CSRD

Postponement of reporting: CSRD reporting postponed until 2028 for wave 2 companies and until 2029 for wave 3 companies.
Increasing the thresholds for applicability: CSRD to apply to large companies with more than 1000 employees plus either a turnover above €50 million or a balance sheet total above €25 million, with the same 1000 employee threshold applying to parent companies of large groups.
Reducing value chain "trickle down": new measures to limit the reporting and due diligence obligations on smaller companies down the value chain.
Commitment to revise the ESRS (European Sustainability Reporting Standards).
Removing the requirement for future sector-specific standards.
Removing the requirement to transition to reasonable assurance (i.e. remain at limited assurance).
Note the Omnibus Package does not change the 'double materiality' concept.

CS3D

Postponement of application: CS3D application postponed by one year until 2028 for wave 1 companies (with deadlines for wave 2 and 3 remaining 2028 and 2029, respectively).
Reducing the scope of CS3D due diligence: Limiting identification and assessment of actual or potential adverse impacts to own operations and direct business partners, with the obligation to assess indirect business partners only in case of "plausible information" on adverse impacts.
Removing requirement to terminate business relationships as a last resort.
Extending intervals for monitoring the adequacy and effectiveness of due diligence (from yearly to every 5 years).
Removing civil liability regime (civil liability will be determined by national law).
European Commission to provide guidance on due diligence and transition plans prior to implementation.

EU Taxonomy

Limit Taxonomy reporting obligations to the largest companies/groups (1000 employees and €450 million net turnover) (aligned with CS3D thresholds), voluntary full or partial reporting for all other CSRD companies/groups.
Introducing a financial materiality threshold for Taxonomy reporting and reduction of the reporting templates by around 70%.
Adjustments to the main Taxonomy-based key performance indicator for banks, the Green Asset Ratio (GAR).
Simplification of DNSH (proposed and announced as further review).

In terms of next steps:

Proposals to postpone application of CSRD and CS3D to upcoming waves of in-scope entities is expected to be less politically difficult (in the interests of allowing time for legislators to progress substantive simplifications). The expected timeline is 4 to 6 months.
The remaining substantive amendments are expected to take longer to agree, and the expected timeline is 12 to 18 months.

For more detail on the impacts of the proposed changes, please see our briefing.

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Article tags

ESG EU Taxonomy Omnibus sustainability CSRD CS3D

Related categories

Sustainability eu ESG Climate Change

Key contacts

Silke Goldberg

Partner, London

Sarah Ries-Coward

Partner, London

Heike Schmitz

Partner, Co-Head ESG EMEA, Germany

Leonie Timmers

Senior Associate, Madrid

Rebecca Chin

Senior Associate, London

Mika Morissette