Waiting on the Omnibus – The EU’s next move

With 2025 marking the first year for Corporate Sustainability Reporting Directive (CSRD) reporting—the irony is hard to miss—the European Commission (EC) is now set to propose a plan to streamline the EU regulatory landscape, including the CSRD, CSDDD, and the EU Taxonomy.

What’s driving the Omnibus?

The EC has warned that without decisive action to reduce administrative, regulatory, and reporting burdens, business growth will remain constrained.

On 27 November 2024, EC President Ursula von der Leyen introduced the Competitiveness Compass, a key milestone in the EU’s strategy to strengthen global competitiveness. As part of this initiative, the upcoming Omnibus package aims to shake up sustainability reporting. Here’s what’s expected to be proposed later this month:

Simpler, smarter reporting

• The new rules will aim to streamline sustainability reporting to better serve capital providers. We hope businesses will get clearer guidelines on what to track, especially in high-risk industries. The goal is to cut out unnecessary data, making it easier for companies to focus on material topics, i.e. what really matters for their operations and investors.

A new definition for small mid-caps

• Companies with 250 to 1,500 employees under €1.5B in revenue, or balance sheets below €2B will get their own tailored reporting requirements similar to SMEs. This move could exempt up to 31,000 EU businesses from certain sustainability requirements.

Less red tape, more growth

• Reporting burdens will drop 25% for large firms and 35% for SMEs. The goal is that smaller companies will have less paperwork and lower costs for compliance, giving them more money and time to invest in growth, new ideas, and improving their business. They’ll also face fewer reporting hassles when working with larger companies.

What’s the reaction been like?

With no official word from the EC yet, speculation is growing around the Omnibus legislation—especially its impact on sustainability reporting. This comes after von der Leyen said, “We will look at the triangle of Taxonomy, CSRD, CSDDD.”

Rumours hint at possible CSRD delays for SMEs and non-EU companies, and even a pause or rollback of the CSDDD, which is in the early stages of implementation.

Critics warn that weakening the rules could create legal uncertainty, undo progress from the European Green Deal and harm EU investments. While officials argue that simplification supports competitiveness, many businesses see strong sustainability reporting as crucial for managing ESG risks and staying ahead in a global market.

What’s our view?

The Omnibus package is set for release to the public on 26 February 2025. Then the debate really will begin on its rollout and impact.

In the meantime, businesses in the first wave of CSRD reporting must still comply to avoid legal penalties, public scrutiny, and reputational risks. Our advice for now is to “keep calm and carry on”. For those with reporting obligations starting in 2026, staying flexible will be essential as requirements continue to evolve. With the Omnibus package expected to simplify reporting, now is the time to identify and streamline the most complex and repetitive areas. The benefits of reporting to the CSRD still apply – more strategic conversations internally, collaboration across the business, and a better understanding of holistic sustainability risks and opportunities. Although streamlining and clarity would be a positive, we hope the EU doesn’t throw the proverbial baby out with the bathwater in its decision-making process. Stay tuned!

Whether you’re new to sustainability reporting or have years of experience, evolving regulations are reshaping the landscape. If you need help thinking about how you can prepare, please get in touch with sarah.roper@luminous.co.uk.