Omnibus arrives: What Leaders Need to Know
26th February 2025

CSRD: Fewer Companies, Simplified Requirements, Delayed Deadlines

​

The Corporate Sustainability Reporting Directive (CSRD) is getting a trim to reduce costs while keeping core transparency requirements intact.

​

First, double materiality remains, so there’s that (and that’s a relief, if we do say so ourselves). But sector standards have been scrapped (disappointing), so expect continued variability across companies in the same sector in terms of entity-specific reporting.

What’s changed (examples)

​

• Fewer companies in scope: Only firms with 1,000+ employees and €50M+ turnover or €25M+ assets will be in scope, eliminating 80% of the originally scoped companies. In addition, reporting by companies with more than 1,000 employees but turnover below EUR 450 M will likely be made voluntary. For those in scope, standards will be revisited.

​

• No phase-up to reasonable assurance: Companies would not be required to transition from limited to reasonable assurance on sustainability reporting, avoiding a costly audit expansion.

​

• Some relief on value chain reporting: Large companies can only request necessary information from SMEs in their value chain, reducing trickle-down reporting burdens on smaller suppliers.

​

• Deadlines extended: Companies originally set to start reporting in 2026 or 2027 would have until 2028, giving them two extra years to prepare. Our take: Use it wisely!

​​

What it means for companies

​

• If your company has fewer than 1,000 employees, you will likely no longer need to comply with CSRD unless reporting voluntarily. Is there value? We think so!

​

• If your company remains in scope, reporting will likely be simpler than expected – potentially fewer disclosures, no sector add-ons, and no extra assurance – but whether this bears out in reality is an open question. Those of us who have been through the “easier” assurance process know this is no cake walk.

​​

Strategically, you have a decision to make. The reasons that made CSRD important to sustainability strategy don’t go away. 

​

EU Taxonomy: Narrower Scope, More Flexibility, Simpler Reporting

​

The EU Taxonomy, which defines which economic activities count as "sustainable", is also undergoing significant changes.

​

What’s changed (examples)

​

• Most companies won’t need to report: Since CSRD scope is shrinking, only large companies (1,000+ employees) will be required to disclose Taxonomy alignment as long as they also exceed the final threshold above which reporting is not voluntary.

​

• More flexibility for partial alignment: Who doesn’t love partial credit? Maybe when it is tied to the EU Taxonomy. Companies can now report activities that are “partially aligned” instead of an all-or-nothing approach. However, having gone through this, this is not likely to reduce the reporting burden, although it may motivate companies to push for alignment. 

​

• Materiality thresholds: New provisions would allow companies to avoid assessing Taxonomy-eligibility and alignment of their economic activities that are not financially material for their business (e.g., those not exceeding 10% of their total turnover or capital expenditure).

​

• 70% reduction in reporting templates with fewer metrics, less complexity, and lower costs. Curious to see how this will look in reality, since the underlying calculations are far more complicated than the template (which is a bit of a bear, admittedly).

​

• Refined “Do No Significant Harm” (DNSH) criteria, making it easier for companies to prove compliance in areas like pollution and chemical use.

​

• Green Asset Ratio (GAR) adjusted for banks, so they don’t have to count loans to non-reporting SMEs in their sustainability calculations.

​

What it means for companies

​

• You may not need to report, but many financial institutions and investors look at this information, so as with CSRD, voluntary reporting could have its benefits.

​

• EU Taxonomy reporting will remain complex, no matter how much partial credit or template streamlining is done. Using the extra time to get started will be critical.

​

CSDDD: More Focused, Less Frequent, Lower Risk (?)

​

The Corporate Sustainability Due Diligence Directive (CSDDD) is being revised to ease compliance burdens, particularly for companies with complex global supply chains.

What’s changed (examples)

​

• Supply chain assessments every five years (instead of annually), reducing compliance costs and administrative workload.

​

• No new EU civil liability rules. Companies will not face EU-imposed lawsuits for due diligence failures—national laws will continue to apply.

​

• Clearer guidance on compliance. The EU will fast-track guidance by mid-2026, giving companies time to adjust before enforcement begins.

​

What’s Next?

​

The legislative proposals will now be submitted to the European Parliament and the Council for their consideration and adoptions, and there will be much work to do on the specifics.

​

What should leaders do now?

​

A few practical tips, and a request.

​

• Check if you’re still in scope. If you’re under 1,000 employees, you may no longer need to comply with CSRD, CSDDD, or Taxonomy reporting.

​

• Stay proactive. Investors, banks, and customers still care about sustainability, so voluntary reporting may still be a smart business move.

​

• And while these changes ease reporting burdens, they do not diminish the importance of sustainability itself. 

​

Our hope: To all who say sustainability should not be a check-box exercise, it’s time to walk the talk! We hope you will stay the course.

​

You know where to find us – we are here to help.