Significant changes expected in sustainability reporting
The European Commission is simplifying rules on sustainability and EU investment. On 26 February 2025, it adopted the first of two Omnibus packages aimed at simplifying sustainable financial reporting, sustainability due diligence, the EU tax system, the carbon cap adjustment mechanism and the European investment programs.
What are the main changes?
CSRD:
- Around 80% of companies will be excluded from the scope of CSRD, and sustainability reporting will apply to the largest companies;
- Only large companies with a turnover of €50 million / balance sheet total of €25 million and >1000 employees would be affected
- Postpone for two years (until 2028) the reporting obligations for companies currently covered by the CSRD, with reporting obligations from 2026 or 2027,
- Only limited certainty is required,
- Fewer mandatory data points are expected under the revised ESRS,
- No sector-specific standards will be introduced.
EU Taxonomy:
- Reduced reporting burden and reporting obligations under EU taxonomy (the latter will be aligned with the CSDDD).
CSDDD:
- Simplification of sustainability due diligence requirements,
- Systematic due diligence obligations will only apply to direct suppliers,
- The frequency of periodic assessment and monitoring will be changed to 5 years (from 1 year), with ad hoc assessments where necessary,
- Limit the amount of information that can be requested by large companies,
- The application of the sustainability due diligence requirements for the largest companies will be delayed by one year (until 26 July 2028) and the adoption of the guidelines will be brought forward by one year (until July 2026).
Next steps
The proposals will be presented by the Commission to the European Parliament and the European Council for consideration and adoption.
The changes to the CSRD, CSDDD and CBAM will enter into force once the co-legislators agree on the proposals and once they are published in the Official Journal of the EU.
The changes to the Taxonomy will be adopted following public feedback and will apply at the end of the scrutiny period by the European Parliament and the Council.
More information:
Press release
Q&A
