If your sustainability team has been scrambling to meet European reporting requirements, you may want to pause — and breathe. On 3 April 2025, the European Parliament voted in favour of a sweeping update to the Corporate Sustainability Reporting Directive (CSRD), known as the CSRD Omnibus Directive.
This isn’t a repeal — it’s a strategic reset designed to address feedback from companies, investors, and Member States who argued the sustainability rulebook was becoming too complex, costly, and fast-moving. The aim? To reduce unnecessary administrative burden, particularly for SMEs and non-EU firms, while keeping the environmental ambition of the European Green Deal intact.
So what is the Omnibus Directive, really?
The Omnibus Directive is a formal legislative proposal — now endorsed by the European Parliament — to simplify and delay certain obligations under both the CSRD and the Corporate Sustainability Due Diligence Directive (CSDDD).
In practical terms, the Omnibus introduces:
Extended deadlines for many companies
Higher thresholds, reducing the number of firms in scope
Postponement of sector-specific standards (indefinitely)
Lighter, voluntary sustainability reporting for SMEs
A stronger value chain “cap”, reducing demands on small suppliers
Alignment of CSRD with the CSDDD, particularly for non-EU company thresholds
It’s not a retreat from climate ambition — it’s a much-needed recalibration to ensure the EU’s sustainability framework is feasible and focused.
What the changes mean for businesses
If you’re a large company based in Europe
You’re still in scope — but the definition of “large” is now much stricter.
The employee threshold for CSRD reporting jumps from 250 to 1,000.
This change alone exempts nearly 80% of previously in-scope companies, significantly narrowing the field.
Sector-specific European Sustainability Reporting Standards (ESRS) have been indefinitely delayed. These were originally due in June 2024 and would have added complexity across industries like transport, manufacturing, and banking.
Limited assurance remains, but no near-term move to reasonable assurance, reducing expected audit burdens.
The first set of ESRS, adopted in 2023, still applies — but a simplified revision is expected in mid-2025, aiming to reduce reporting complexity and costs.
If you’re a U.S. (or non-EU) company with EU Operations
Previously, non-EU parent companies with €150 million+ in EU turnover, and a qualifying subsidiary or branch, had to comply with the CSRD from FY2029.
Under the Omnibus, the threshold jumps to €450 million, aligning it with the CSDDD.
This offers non-EU multinationals significantly more breathing room and simplifies alignment across both sustainability and due diligence directives.
If you’re an SME or a supplier to larger companies
The changes are particularly favourable:
Listed SMEs now have until FY2028 to report under CSRD — a three-year delay.
The voluntary SME reporting standard is expected in late 2026, providing a lighter option for those that choose to report or are encouraged to by customers.
Crucially, the value chain reporting burden on smaller suppliers has been capped. Large firms cannot demand detailed ESG data from suppliers with fewer than 1,000 employees, unless:
The data is standardised across the industry, or
The supplier voluntarily adopts the upcoming SME standard
This strengthens supplier protection and reduces pressure on smaller firms, while still keeping value chain visibility on the agenda.
Strategic implications
The CSRD Omnibus isn’t a watering-down — it’s a strategy shift. For companies still in scope, it’s a chance to focus on material issues, streamline internal processes, and invest in high-quality data systems. For those temporarily out of scope, it’s a rare opportunity to build capacity voluntarily, free from regulatory panic.
The long-term direction is unchanged:
Scope 3 emissions remain in play, though small supplier data demands are now better defined
High-quality, decision-useful data is the goal — not just tick-box compliance
Regulatory pressure will return — but hopefully in a more targeted, manageable form
At Mattermatics, we specialise in helping companies calculate and manage complex Scope 3 emissions — whether you're reporting under CSRD, preparing for CDP disclosures, or trying to extract clean data from your suppliers. We see this Omnibus shift as a strategic pause, not a stop, and we’re helping clients use this window to build robust, efficient reporting systems.
Final word
While the European Parliament has approved the Omnibus Directive, it still requires formal adoption by the Council of the EU. That said, the vote on April 3rd signals strong political consensus, and changes are likely to pass into law later in 2025.
In short: don’t delay. Simplify. Focus. Prepare now — before sustainability reporting regains speed.
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