On February 26, 2025, the European Commission released the much-anticipated Omnibus Package, which proposes significant reductions to key EU legislation instruments governing corporate sustainability (CSRD, CSDDD, EU Taxonomy). The aim is to simplify corporate sustainability obligations as part of the broader EU competitiveness strategy. Should the proposal progress, it could have a considerable impact on national regulations and companies’ reporting obligations.

Reduction of Reporting Requirements

The Omnibus Package proposes a reduction in the reporting burden under the Corporate Sustainability Reporting Directive (CSRD). According to the proposal, sustainability reporting would only be mandatory for companies with more than 1,000 employees, and either a turnover exceeding €50 million, or a balance sheet total exceeding €25 million. This proposal would significantly reduce the number of companies subject to reporting obligations, with up to 80% fewer companies falling under the scope of regulation compared to the original legislation. Out-of-scope companies would still be able to report voluntarily based on a simplified standard (VSME).

The largest and most immediate changes would affect the so-called “second-wave” companies, i.e., large companies meeting two of three criteria (turnover of €50 million, balance sheet total of €25 million, 250 employees), as well as third-wave publicly listed SMEs. These companies would be granted a two-year extension to prepare their reports, allowing them to avoid reporting amidst regulatory uncertainty and before potentially falling outside the scope of the regulation.

Reduction of Reported Information

The Omnibus Package also proposes a significant reduction in the number of data requirements within the EU sustainability reporting standards (ESRS) and aims to clarify the relevant information. However, this reduction is not intended to diminish the importance of companies’ materiality assessments in their reporting. Additionally, the so-called “value-chain cap” rule would prevent companies and banks from requiring smaller companies within their value chains, which do not fall under CSRD’s scope, to provide more than the data required under the voluntary sustainability reporting standard (VSME). It is important to note, however, that the content of VSME may also undergo further changes.

What’s Next?

The Commission’s proposal represents the first stage. The proposal will still be reviewed by both the European Parliament and the Council, and the final regulation will require agreement on its content. The CSRD has already been enacted in Finland through national legislation, which will continue to apply in Finland until any changes are made by the Finnish Parliament. As the Omnibus proposal significantly deviates from the current obligations, it creates uncertainty, particularly for second-wave companies, which should report their data by spring 2026. It is clear that companies may continue to follow the current Finnish legislation, but the Omnibus proposal could allow for reporting to be delayed even this year. It is also important to note that, despite EU requirements, companies must still be able to respond to investors’ and other stakeholders’ demands regarding sustainable development and sustainability reporting. We will continue to monitor the progress of the regulatory process and its impact on companies’ obligations.