European Commission publishes 'Omnibus' proposals

What does this mean?

The The Omnibus package follows prior announcements of the EU’s desire to simplify its sustainability reporting against the political backdrop of focusing on economic competitiveness and growth. This includes an announcement by President von der Leyen (8 November 2024) and the publication of the ‘Competitiveness Compass’ for the EU (29 January 2025).

These are far-reaching proposals which limit the scope and simplify the substance of the legislation, while also proposing to delay the application for some parts of CSRD and CSDDD.  

Included in the package are two Omnibus legislative proposals (1 and 2), Q&A on the proposals, and staff working documents for Omnibus 1 and 2. Proposed amendments address:

• The content of the CSRD and the CSDDD for certain sustainability reporting and due diligence requirements (i.e. the ‘content’ proposals).

• The application dates for certain aspects of the CSRD and the CSDDD (i.e. the ‘stop the clock’ proposal).

• The CBAM Regulation.

• The InvestEU Regulation. 

Examples of proposed changes include:

• Reducing CSRD’s scope by about 80% by limiting it to large undertakings with more than 1000 employees.

• Simplifying aspects of CSDDD’s due diligence requirements.

• Introducing the option for companies to report partial alignment with the EU Taxonomy (e.g. to foster transition finance).

Please see PwC’s ‘in brief’ and ‘tax policy alert’ for further detail on the content of the Omnibus proposals.

What do firms need to do?

The Omnibus proposals are not yet final and must pass through the EU legislative adoption process, where they may change significantly. Tracking these changes alongside local implementation and global reporting requirements will be complex. Firms should consider how to systematically monitor regulatory developments to track changes, understand how these may impact their business, and market responses. 

Firms should assess how the proposed thresholds may affect their CSRD and EU Taxonomy obligations, and determine new reporting timelines if the delay is confirmed. The ’stop the clock’ proposal would require Member States to transpose the Directive by 31 December 2025, subject to the timely approval by the European Parliament and the Council of the European Union. However, the current CSRD, CSDDD, and EU Taxonomy requirements remain in effect until formal adoption. Firms should therefore consider what “no regrets” activities they should complete to support reporting obligations should the proposals change/not be transposed in local law in time. 

The Omnibus' proposed delays in particular offer UK asset managers an opportunity to prioritise investor-focused sustainability reporting, including the FCA’s upcoming SDR product and entity reports, and ongoing compliance with Task Force on Climate-related Financial Disclosures (TCFD)-aligned product disclosures.

In addition, the CSRD scope amendments offer firms that may fall out of scope an opportunity to take a more strategic approach to sustainability reporting. For example:

• Small and medium enterprises that may now be exempt from mandatory reporting under the Omnibus could seize this chance to voluntarily disclose key sustainability information and consider how best to position themselves for the proposed future voluntary reporting framework.

• UK firms that were supporting their wider group firms with CSRD compliance should begin preparing for International Sustainability Standards Board (ISSB) standards, as the UK Government is expected to publish ISSB-aligned exposure drafts in Q1 2025, followed by consultations on disclosure requirements later in the year.   

• The FCA encourages listed companies to consider voluntary reporting ahead of the UK’s formal endorsement process. It also suggests that asset managers can use ISSB as a starting point for meeting the SDR reporting requirements referred to above, so these efforts will be time well spent.

First steps towards ISSB compliance could involve using the CSRD DMA exercise as a foundation for ISSB materiality assessments. More broadly, firms should integrate DMA outputs into their wider risk management framework, as this can help firms effectively navigate sustainability challenges and identify opportunities.

Additionally, UK firms should track EU Taxonomy developments, as they may shape a future UK Green Taxonomy if the Government moves forward with it, particularly given the support for leveraging the EU framework to enhance interoperability.

Next steps

The Omnibus proposals are not open for public feedback. The timing for adoption of the proposals is uncertain - please see the PwC ‘in brief’ for further detail.

The EU Taxonomy Delegated Act consultation period ends on 26 March 2025.