Overview

The European Parliament has approved significant changes to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). The European Commission introduced the Omnibus Package in February 2025 to reduce regulatory burdens and give companies additional time to prepare for compliance.

On 3 April 2025, the European Parliament voted to approve the changes, having used the fast-track procedure.

The changes will be very significant for companies preparing for compliance with CSRD and CSDDD, and we summarise the key points below.

The Omnibus Package includes the following:

• A proposal for a directive amending the CSRD and the CSDDD.
• A draft delegated act amending the Taxonomy Disclosures and the Taxonomy Climate and Environmental Delegated Acts (subject to public consultation).
• A proposal for a regulation amending the Carbon Border Adjustment Mechanism Regulation.
• A proposal for a regulation amending the InvestEU Regulation.

Key updates to CSRD

The CSRD is a reporting regime which requires certain companies to make annual sustainability disclosures across a range of topics including climate, water, environmental protection and human rights. Our previous article on the regime is here.

The key changes which will now be introduced are:

• Two-year postponement for reporting – Companies that were due to report in 2026 and 2027 (so-called wave 2 and 3 companies) will benefit from a two-year postponement.
• Increase in employee threshold for EU reporting entities – Reporting requirements will only apply to large undertakings with more than 1,000 employees ("large " means those with net turnover of more than €50 million or a balance sheet total of €25 million).
• Increase in turnover threshold for non-EU parent companies – The threshold for EU-generated net turnover increases from €150 million to €450 million.
• Changes to ESRS – The Commission will revise the European Sustainability Reporting Standards (ESRS), with the aim of substantially reducing the number of data points, clarifying unclear provision and improving consistency with other pieces of legislation.
• No sector-specific standards – The Commission will no longer adopt sector-specific standards.
• Limited assurance only – Reports will be subject to limited assurance only (previously there was an option for the Commission to require reasonable assurance).
• "Value chain cap" – For companies which will no longer be in scope of the CSRD, the Commission will adopt a voluntary reporting standard, based on the standard for SMEs developed by EFRAG.
• No change to "double materiality" – The Omnibus proposal does not change the "double materiality perspective", meaning that in-scope companies will have to report about how sustainability risks affect their business and about their own impact on people and the environment.

Key updates to CSDDD

The CSDDD introduces a due diligence obligation on large EU companies and non-EU companies with significant EU activity to address specific adverse human rights and environmental impacts in their own operations, their subsidiaries and their chains of activity. The key changes which will now be introduced are:

• Additional time to prepare – The transposition deadline is delayed by one year (to 26 July 2027) and the first deadline for the largest companies to comply with sustainability due diligence requirements is also delayed (to 26 July 2028).
• Due diligence obligation limited to direct business partners – Companies will not now have to conduct in-depth assessments at the level of indirect business partners (subject to some exceptions, such as where the company has plausible information suggesting that adverse impacts have arisen or may arise there).
• No requirement to terminate – Removes the requirement for companies to terminate business relationships as a last resort when severe potential or actual adverse impacts are identified. 
• Frequency of updates – Allows for longer intervals between regular periodic assessments and updates (from one year to five years).
• Deferring to the various national civil liability regimes – The proposals leave it to national law to determine whether its civil liability provisions override otherwise applicable rules of the third country where the harm occurs.
• Aligning the requirements on the adoption of transition plans for climate mitigation with the CSRD

Next steps

The Omnibus package has now been approved by the European Parliament. Once adopted, it will need to be transposed into national law by each EU member state, meaning local implementation timelines and specific requirements may vary across jurisdictions.

If you would like to discuss how this might affect you, please get in touch with your usual Dentons contact.