EU Commission’s Omnibus Package: Plans to Simplify CSRD, Taxonomy, and CSDDD Reporting

In November 2024, European Commission President Ursula von der Leyen announced the Omnibus ESG Regulation, a legislative package designed to consolidate and simplify corporate sustainability reporting obligations. By integrating CSRD (Corporate Sustainability Reporting Directive), CSDDD (Corporate Sustainability Due Diligence Directive), and the EU Taxonomy Regulation, the Commission aims to reduce complexity while maintaining strong ESG commitments. You can find more details about that announcement in our blog post.

The European Commission published the Competitiveness Compass on 29 January 2025, which brings important updates, especially regarding sustainability reporting and regulatory simplifications. To access the complete document, please visit the European Commission’s website.

SME Relief

Many of the proposed measures will focus on smaller businesses, aiming to reduce reporting burdens by at least 25% for all companies and 35% for SMEs.

A crucial step is the introduction of a new category for small mid-cap companies— it would include businesses that are larger than SMEs but smaller than large enterprises. These companies will be subject to less complex sustainability reporting and due diligence requirements than large firms, similar to the simplified CSRD obligations for SMEs.

Reality Check: Assessing the impact of Simplification

The Omnibus package introduces a Reality Check mechanism where the Commission will directly engage with companies, including SMEs, to discuss the impact of simplification measures.

Recent proposals from major EU economies, including France and Germany, have called for pragmatic adjustments such as:

• CSDDD Threshold Reassessment: Raising the employee threshold for CSDDD from 1,000 to 5,000 employees, effectively exempting around 80% of businesses from due diligence obligations.
• CSRD Implementation Delays: Postponing certain reporting requirements for SMEs to give them more time to prepare.
• Sector-Specific Reporting On Hold: Delaying the introduction of new sector-specific sustainability disclosure standards.

Advisory Oversight for Simplification

A key element of the Commission’s Competitiveness Compass is the formation of a high-level Simplification Advisory Group to oversee and provide expert guidance on regulatory simplification efforts. However, the exact composition and function of this group remain unclear. The group’s mandate includes:

• Monitoring the implementation of new regulatory simplifications
• Assessing ongoing reporting challenges faced by businesses
• Recommending further refinements to improve efficiency and compliance

By integrating industry feedback into the regulatory process, the European Commission aims to strike a better balance between sustainability goals and economic competitiveness.

 

Next Steps

• 26 February 2025: The European Commission will review and discuss its legislative proposals for the Omnibus package.
• Legislative Process: The package will be reviewed by the European Parliament and Council. However, the timeline is pending.

 

Impact on financial institutions

For financial institutions, these developments signal a shift toward a more streamlined regulatory landscape. With possible reduced reporting obligations for SMEs, postponed sector-specific requirements, and a new advisory group overseeing implementation, institutions can expect greater clarity and efficiency in sustainability-related compliance.

Until official decisions are made, the current CSRD requirements and rules remain in place.

 

cleversoft Support

cleversoft is closely monitoring these developments and will continue to provide insights on how these changes may impact your sustainability reporting and due diligence processes and will directly incorporate these changes into the service.

With the cleversoft compliance commitment you receive a service with integrated regulatory updates as soon as they are officially released by the regulator.

Learn more about our CSRD reporting services on our website.

If you have any questions about CSRD solution, please send us a message via our contact form. Our experts will be happy to advise you on the details.