The European Green Deal has faced a significant shift as the European Parliament voted on the First Omnibus Package. This decision effectively postpones CSRD obligations for wave 2 and wave 3 companies by two years, and CSDDD obligations by one year.
But what does this mean for your business, and what happens next?
What are the practical consequences of the First Omnibus package?
For Wave 1 companies, the changes brought by the Omnibus Package do not remove their current reporting obligations. These companies must still publish a report in 2025 for the financial year 2024. In many cases, reports are already underway.
For Wave 2 and Wave 3 companies, the postponement means they can choose to voluntarily report on CSRD and CSDDD or use the VSME (Voluntary reporting standard for SMEs) as proposed by EFRAG.
Which companies are considered Wave 1?
- Large public interest entities
- Listed companies on EEA markets (excluding SMEs)
- Companies with more than 1,000 full-time employees (FTEs)
Due to this change, approximately 80% of companies are now removed from the CSRD scope, leaving around 10,000 entities still affected.
Why was the first Omnibus package introduced?
The Omnibus Package is a response to concerns about the EU’s competitiveness. The Draghi report of 2024 suggested that the EU’s economic performance was hindered by stringent sustainability regulations, sparking political and business debates.
Despite this postponement, the EU remains committed to decarbonisation, as shown by the launch of the Clean Industrial Act. However, the need to balance economic growth with environmental responsibility remains a pressing issue.
What changes does the First Omnibus package introduce?
- Reduced reporting requirements: SMEs see a 35% reduction in reporting obligations, while larger companies face 25% fewer data points to report on.
- Simplified ESRS: The number of data points in the European Sustainability Reporting Standards (ESRS) has been streamlined, with a focus on quantitative data rather than qualitative. Sector-specific standards have been postponed indefinitely.
- Lower audit costs: Assurance requirements remain in place, but reduced complexity lowers the associated costs.
What’s next for businesses building resilience?
While the Omnibus Package delays some requirements, it does not eliminate the need for proactive sustainability measures. Companies still need to prepare for a volatile business landscape marked by trade wars and climate challenges.
Key steps to futureproof your business:
- Assess current and potential risks throughout the value chain
- Map out suppliers across several tiers when necessary
- Use due diligence and remediation processes whenever needed
- Pre-qualify and check potential new suppliers
- Understand under which circumstances a particular commodity, raw material or geographical area might be subject to volatility
Book a meeting to understand how the Omnibus Package affects your company or request a free trial of Factlines.
Key terms: Omnibus package and CSRD
- Omnibus: The word "omnibus" comes from Latin, meaning "for all." In the context of EU legislation, it refers to a single package that combines multiple regulatory updates or changes.
- Omnibus package: A regulatory adjustment that delays reporting requirements for wave 2 and wave 3 companies under the CSRD and CSDDD frameworks.
- First Omnibus package: EU legislation that delays CSRD and CSDDD reporting for certain companies, providing a temporary relief from reporting obligations.
- Second Omnibus package: Expected mid-2025 to further simplify sustainability reporting and adjust regulations.
- Third Omnibus package?: Speculative, but likely focused on refining and optimising reporting requirements.
- CSRD (Corporate Sustainability Reporting Directive): An EU regulation requiring large companies to report on sustainability impacts.
- ESRS (European Sustainability Reporting Standards): A set of standards within the CSRD framework that companies must use to disclose sustainability information.
- CSDDD (Corporate Sustainability Due Diligence Directive): An EU regulation aimed at holding companies accountable for human rights and environmental standards.
- VSME (Voluntary reporting standard for SMEs): A simplified reporting model for small and medium-sized enterprises.
- Wave 1: Large public interest entities and listed companies with over 1,000 FTEs.
- Wave 2: Medium-sized companies with fewer reporting obligations than Wave 1.
- Wave 3: Smaller companies with voluntary or simplified reporting requirements.
- Large public interest entities: Financially significant organisations like banks and insurance companies.
- Listed companies on EEA markets (except SMEs): Companies traded on EEA stock exchanges, excluding small businesses.
- Draghi report: Named after Mario Draghi, former President of the European Central Bank, this 2024 report argued that strict EU sustainability regulations, like CSRD and CSDDD, were harming economic competitiveness. It sparked debates that led to the introduction of the First Omnibus Package.
