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EU Omnibus explained

Unpacking CSRD, CSDDD, and EU Taxonomy updates

The EU Omnibus package aims to streamline sustainability regulations, affecting amongst others the CSRD, CSDDD, and EU Taxonomy. In this Q&A, you’ll find the critical timeline shifts, updated thresholds, and reporting requirements. We also touch on how to prepare your organisation in this evolving regulatory landscape. 

Latest update: 28 April 2025  

The EU Omnibus package on sustainability includes proposals that state the aim to ‘streamline and simplify certain aspects of the EU sustainability framework’, most notably the CSRD (Corporate Sustainability Reporting Directive), CSDDD (Corporate Sustainability Due Diligence Directive), and the EU Taxonomy Regulation. The European Commission released the first Omnibus I and Omnibus II proposals in February 2025.

The EU Omnibus package includes:

  • A proposal for a ‘stop-the-clock’ Directive which delays the timelines for implementation of the CSRD and the CSDDD to accommodate negotiation of the proposal of substantive changes to relevant regulation.
  • A proposal for a ‘substantive’ Directive amending the (content of the) CSRD and the CSDDD . 
  • A draft Delegated Act amending the EU Taxonomy Disclosures and the EU Taxonomy Climate and Environmental Delegated Acts, subject to public consultation.
  • Changes to the European Sustainability Reporting Standards (ESRS).
  • A proposal for a Regulation amending the Carbon Border Adjustment Mechanism (CBAM) Regulation. 
  • A proposal for a Regulation amending the InvestEU Regulation.

The documents released are proposals, and therefore explicitly subject to further debate and negotiations. This means that the final outcome may be different from the proposals, including thresholds for applicability and effective dates. As the negotiations are ongoing, it is still unclear if more changes are on the horizon or if thre may be amendments to some of the proposed changes.

*Check the latest status and timelines on the above proposals in the answer to ‘What’s the status and timeline of the EU Omnibus package?’ 

For details you can visit the European Commission website: Omnibus Simplification Package 

What are the key changes in the EU Omnibus package?

The key changes listed below only include high-level information on the EU Omnibus proposals regarding the CSRD, CSDDD, and EU Taxonomy. The documents released are proposals, and therefore explicitly subject to further debate and negotiations. This means that the final outcome may be different from the proposals, including thresholds for applicability and effective dates. As the negotiations are ongoing, it is still unclear if more changes are on the horizon or if there may be amendments to some of the proposed changes.

The agreed delays under the ’stop-the-clock’ Directive proposed under the EU Omnibus package are: 

  • For current wave 1 companies, the CSRD requirements will remain unchanged. The application dates for large companies that have not yet started reporting under the CSRD (Wave 2), as well as listed SMEs (Wave 3), are delayed by 2 years to reporting in respectively 2028 and 2029 on the prior financial year.
  • The transposition deadline and the first phase of application (covering the largest companies) of the CSDDD is postponed by 1 year, postponing the transposition deadline to 26 July 2027 and the first phase of the application of the sustainability due diligence requirements, covering the largest companies to 26 July 2028. The necessary guidelines by the European Commission will be postponed to July 2026. 

Proposed modifications to the CSRD: 

  • Changes to the scope: The reporting requirements would only apply to large undertakings with more than 1000 employees (i.e. undertakings that have more than 1000 employees and either a turnover above EUR 50 million or a balance sheet total above EUR 25 million). 
  • ‘Value chain cap': proposed adoption of a voluntary reporting standard, based on the standard for SMEs (VSME) developed by EFRAG with the aim of limiting the information that companies in scope of the CSRD can request from companies out of scope of the CSRD.
  • Intention to revise the European Sustainability Reporting standards (“ESRS”): proposed revision of the delegated act establishing the ESRS, with the aim of reducing the number of data points, clarifying provisions, and improving consistency with other pieces of legislation.
  • Deletion of sector-specific standards requirement: proposed deletion of the requirement for the Commission to adopt sector-specific standards.
  • Removing the reasonable assurance standard: proposed deletion of the possibility to move from a limited assurance requirement to a reasonable assurance requirement.

Proposed modifications to the CSDDD:

  • Changes to scope: focusing on a company's own operations, those of their subsidiaries and their direct business partners in their chain of activities (‘tier 1’). Beyond tier 1, CSDDD due diligence requirements would apply only in cases where the company has plausible information suggesting that adverse impacts have arisen or may arise there.
  • Changes to sustainability due diligence requirements, including prolonging the intervals between two regular periodic assessments from 1 year to 5 years; changes to stakeholder engagement obligations; and proposed removal of the obligation to terminate the business relationship as a last resort measure.
  • Limiting the information companies can request from smaller direct business partners (those with fewer than 500 employees) to data points aligned with the information specified in the CSRD voluntary sustainability reporting standards (VSME standards). However, companies can request additional information if it is deemed essential for identifying adverse impacts and is not obtainable from other sources.
  • Deletion of the harmonised EU conditions for civil liability, instead deferring to national law.
  • Transition plans remain mandatory, but the proposal modifies the transition plan requirement to strengthen alignment with the CSRD.

Eliminate the possibility to expand downstream due diligence obligations for financial services firms. This does not mean that financial services will be out of scope but rather that the scope of application will not be extended to their downstream value chain. 

Proposed modifications to the EU Taxonomy: 

  • Limit EU Taxonomy reporting obligations to the largest companies, with a voluntary “opt in” for reporting by other large companies within the future CSRD scope, but a turnover below EUR 450 million.
  • Proposal for companies to report voluntarily on partial EU Taxonomy-alignment (where activities meet certain Taxonomy technical screening criteria but not all).
  • The Commission is also consulting on amendments to the EU Taxonomy Disclosures, Climate and Environmental Delegated Acts to simplify reporting templates, exempt companies from assessing EU Taxonomy-eligibility and alignment of their economic activities that are not financially material for their business, and options to simplify the most complex “Do No Significant Harm” criteria. 

With the package now published, the legislative proposals will undergo the standard EU legislative process. The below reflects the status as per 23 April 2025. Please reach out to Deloitte for the latest updates.

The proposal for the ‘stop-the-clock’ Directive has been approved by both the European Parliament and the European Council in Q2 2025. The Directive was published in the EU Official Journal in April 2025. The Directive now needs to be transposed by Member States to national law, which has to be completed by the end of 2025. Although companies will not have legal certainty on these changes until the Directive is transposed by Member States, it is now likely the delays will ultimately be implemented.

The progress on a ‘substantive’ Directive amending the content of the CSRD and CSDDD is limited. The Directive is expected to be transposed by Member States to national law 12 months after entry into force but will first have to be negotiated between the co-legislative bodies of the EU, the timeline of which is currently still unclear. 

The European Parliament has set out a tentative schedule for negotiations, with discussions starting as early as April and a plenary vote on the Parliament’s final position by October 2025. The European Council has called on the EU co-legislators to adopt the Substantive proposal as soon as possible in 2025. These timelines would mean that a final Trilogue agreement will likely not be reached before 2026.

Comments on the proposal by Members of the European Parliament and some Member States have been reported in the press, but neither the Parliament nor Council has formally published anything on their negotiating positions.

The draft Delegated Act amending the Taxonomy Regulation Delegated Acts will be adopted after a consultation period and will apply at the end of the scrutiny period by the European Parliament and Council.

Note that for Member States that have already transposed the current CSRD, these existing legislations remain in force until the proposed new Directives have been finalised and transposed by Member States to national law. 

We recommend you to continue further sustainability (reporting & strategy) preparations, because:  

  • Companies need to stay resilient. Even without regulations developments such as climate change and resource dependencies will continue.
  • The EU will not water down its overall ambition to become a sustainable economy, meaning longer term sustainability goals will remain. Time for preparation and innovation is needed. 
  • Smaller companies would benefit from using the reporting framework as an input for transformation. Furthermore, smaller companies will still be expected to share insights on sustainability information if they are in the value chain of companies in scope of the CSRD or CSDDD. 
  • Companies need to follow suit in their strategies and business plans. The Double Materiality Assessment informs about the key ESG aspects to address. The rest of the ESRS structure is fit for purpose to drive the related transformation.

Your business will benefit from: 

  • Keeping the momentum in your ESG (reporting) journey. 
  • Identifying technology to support strategic decision-making. 
  • Identifying key risks and opportunities that require a strategic response and transformation. 
  • Learning from peers’ reporting and actions in the first years in a pragmatic way.

We understand that the EU Omnibus package may raise a lot of questions for your business. We’re here to help you navigate this: we specialise in seeing the bigger picture, going beyond compliance to truly embedding sustainability throughout your organisation. Our worldwide network and adoption of AI and other technology tools enable us to tailor our services to meet your needs and provide an end-to-end solution. 

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Rozemarijn Bloemendal

Partner | Legal sustainability
3188 288 3661

Wim Bartels

Partner | ESG reporting
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