OMNIBUS package - simplification of sustainability rules from the European Commission - overview of the proposed changes and how to react to the new information?
26 . The European Commission presented a package of proposals to simplify the requirements of the CSRD, the EU taxonomy and the CSDDD. OMNIBUS aims to reduce administrative burdens while maintaining transparency and compliance with the European Green Deal. The European Commission has quantified the estimated expected annual savings for European companies at €4.4 billion.
The main changes contained in the OMNIBUS proposals:
CSRD (Corporate Sustainability Reporting Directive):
- Change in criteria: obligation to issue a non-financial report only for enterprises with more than 1 000 employees (80% fewer enterprises concerned);
- Shift from the original mandatory publication of the 2025 report by two years, i.e. report in 2027, publication in 2028;
- Simplification of ESRS standards - fewer data points, greater consistency with global standards;
- Abolition of sector-specific rules;
- Abolition of the option to switch to full audit of non-financial reports;
- Concessions for small and medium-sized enterprises;
- Optional reporting according to EFRAG's VSME standards;
- Supplier requirements to the maximum extent specified by VSME standards.
EU Taxonomy:
- Voluntary for companies with a turnover below €450 million;
- Consideration of only significant activities accounting for more than 10% of turnover.
CSDDD (Corporate Sustainability Due Diligence Directive):
- Postponement of mandatory transposition by one year to 26 July 2027;
- Concessions for smaller companies, evaluation every 5 years, possibility to suspend cooperation instead of terminating.
When can we expect the package to be (dis)approved?
There is no simple answer to this question. The European Commission does not fully control the length of the legislative process in the EU and has not issued any binding deadline for the discussion of these proposals. As a matter of priority, the Commission wants to discuss the proposal for a 2-year delay. So there should be clarity on the postponement in the coming weeks or at most 2 months.Further proposals will be approved at a later stage. The most common timeframe is around half a year, when the proposals should be discussed.
What is the reaction of companies? How to deal with the proposals?
"Nothing changes for us, we don't do it because of legislation" or "Good thing we have over 1000 employees and we can keep preparing". These are also reactions from our clients to the proposed changes in the OMNIBUS package. However, every company is in a different situation and it is essential to have a good understanding of all the risks, opportunities and ESG needs that are relevant to that company. For most companies that have already prepared for mandatory reporting, ESG remains a hot topic.Very often, companies are faced with requests for ESG data from their clients among large international companies. The topic remains highly relevant for banks, which will continue to take ESG topics into account when assessing clients. The topic of decarbonisation remains important not only in Europe but also globally. Pressure to reduce the carbon footprint continues. There is also feedback from large multinationals that nothing is changing for them in ESG and that they will want to meet their targets.
In light of the new information, we recommend our clients to pause and analyse the situation thoroughly. Ask questions such as:
- Will I have to submit ESG data to my clients?
- Does ESG interest my bank?
- What is the risk of a complete suspension of the reporting preparation process?
- What sub-activities can I do now that I know I can use in the long run?
If you have a hard time finding answers to these questions, that's okay. Our ESG experts will be happy to contact you to discuss your specific situation in more detail. You can also get answers to your questions and the perspective of other companies affected by this issue at a seminar we have prepared for you. You can register HERE.