CSRD changes through the Omnibus package
The proposed changes to the EU Corporate Sustainability Reporting Directive (CSRD) as part of the Omnibus bill will significantly affect sustainability reporting practices.
One of the most notable changes is the reduction in the scope of reporting companies. Now, the proposed requirements by the European Commission will apply exclusively to large organizations with more than 1,000 employees and either a turnover exceeding €50 million or a balance sheet total above €25 million. As a result, the number of companies subject to these reporting obligations is expected to decrease by approximately 80%, aligning the thresholds more closely with those set in the EU Corporate Sustainability Due Diligence Directive (CSDDD).
However, organizations that fall outside the new reporting scope may benefit from disclosing their sustainability impact. Transparency in sustainability practices can enhance corporate reputation, build trust among stakeholders, reduce risk and ultimately drive business growth. It is increasingly recognized that consumers, investors and partners prefer to engage with companies demonstrating a commitment to sustainability.1
Revised reporting standards: Easing compliance burdens
Regarding reporting standards, companies that meet the newly defined criteria will report according to revised and simplified European Sustainability Reporting Standards (ESRS) — see Table 1 for more details. This new framework is designed to lessen the compliance burden on these companies. In addition, companies that do not fall into the newly defined scope will still have the option to disclose their sustainability performance voluntarily, using a simplified standard set to be established by the European Commission.
The impact of removed sector-specific standards
The Omnibus proposal also cancels the plan to adopt sector-specific sustainability reporting standards. This decision could simplify the overall reporting process. However, it may also result in a lack of tailored approaches for specific industries, depending on their unique sustainability challenges and requirements.
Changes to assurance requirements
Moreover, the Omnibus package has eliminated the possibility for the European Commission to propose moving from a limited assurance requirement to a reasonable assurance requirement, which could effectively reduce the rigor required in the assurance process for reported sustainability information. Limited assurance will still be required, however, which will still create advantages for reporting companies that have invested in managing sustainability information in a way that enhances assurance readiness.
Extended implementation timeline and double materiality assessment remains
The implementation timeline for reporting requirements has also been extended for impacted companies. Specifically, there is a two-year postponement for large companies not yet subject to CSRD and listed small and medium-sized enterprises (SMEs) — Wave 2 in 2027 and Wave 3 in 2028 — which means these businesses will now face reporting requirements starting in 2027. This delay is particularly relevant for companies in Wave 2 that have already initiated their materiality assessments and associated investments, as they may only know months before their deadline whether the Omnibus proposal will pass and CSRD reporting will or will not be compulsory for them. The double materiality assessment will remain in place without changes, requiring companies to continue to evaluate not only how sustainability issues affect their performance but also how their operations impact the environment and society.
While this extension provides additional time for organizations to prepare and adapt to the requirements of CSRD, it also presents challenges by prolonging uncertainty for businesses that are already in motion with their disclosure preparations. While this offers some reprieve on the timeline that sustainability teams may be able to use to focus on improving sustainability performance, companies may need to remain ready to disclose, should the revised version of the CSRD under the Omnibus package not be adopted as initially proposed by the European Commission. As a result, it may be prudent for companies to continue preparations for the time being.
How UL Solutions can help with ESG management
ULTRUS™ software for sustainability reporting
To navigate the evolving sustainability regulatory landscape, the ULTRUS™ software from UL Solutions provides flexible and scalable tools to help you collect, manage and analyze the data required for comprehensive reporting and disclosure activities through UL 360 ESG and Sustainability software. Our software suite provides organizations with the tools to navigate rapidly changing regulations and strengthen their commitment to a more sustainable future.
Advisory services for sustainability reporting
To maximize readiness for sustainability reporting, UL Solutions environmental, social and governance (ESG) advisory services can guide companies through key activities such as materiality assessments, reporting methodology design and policy and action plan development.
Assurance services for sustainability reporting
To build confidence in sustainability reporting, with our ESG assurance services, provided impartiality requirements are met, UL Solutions can perform assurance of selected sustainability information.
Commitment to transparency and accountability
Overall, the aim of these adjustments is to streamline the compliance landscape while maintaining a commitment to transparent and accountable corporate sustainability practices. By voluntarily disclosing sustainability efforts, companies can enhance their reputation and contribute positively to the broader sustainability agenda.
For further specifics regarding these updates, review the European Commission website.
1 World Economic Forum, 2022. Why sustainability is crucial for corporate strategy. https://www.weforum.org/stories/2022/06/why-sustainability-is-crucial-for-corporate-strategy/. Accessed March 2025.
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