What to expect from the Omnibus package: Positions, changes, and implications

The European Commission unveiled the Omnibus package on February 26, 2025, introducing reforms to the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), and Taxonomy regulations. The intention of this change is to simplify sustainability-related reporting obligations, but uncertainty remains.  

The EU Omnibus Package proposes significant simplifications to sustainability reporting and due diligence requirements, benefiting businesses of all sizes. If fully implemented, the proposals are expected to reduce annual administrative costs by approximately €6.3 billion and unlock €50 billion in public and private investments. A major focus is protecting SMEs from excessive sustainability data requests, and reducing the overall reporting burden on companies by significantly limiting the data points covered in the EU Taxonomy. 

Countries that have transposed the CSRD into national law

Currently, only 15 of the 27 EU member states have fully transposed the CSRD into national law. Germany, France, and the Netherlands have adopted legislation, while Sweden and Italy are nearing completion. However, countries like Spain, Poland, and Greece are still in consultation stages, risking inconsistent reporting deadlines and regulatory fragmentation.

Consequences of missing transposition deadlines

If countries fail to transpose the CSRD on time, they will face consequences like:

• Infringement proceedings: The European Commission may initiate legal actions against non-compliant states, potentially leading to fines.
• Legal uncertainty: Businesses operating in delayed jurisdictions may face confusion about their obligations and deadlines.
• Competitive disadvantages: Companies in compliant countries could gain a market edge with established ESG frameworks.
• Pressure on multinational supply chains: Non-European companies may encounter inconsistent reporting demands from EU clients.

Positions from key countries: Germany, France, and Sweden

Let’s take a look at what key countries like Germany, France, and Sweden are hoping for with these impending changes.

Germany: Push for broad scope reductions

• Higher CSRD thresholds: Proposes excluding most mid-cap companies (250-1,500 employees, turnover < €1.5 billion) and limiting reporting to large enterprises (1,000+ employees, turnover < €450 million), potentially exempting 40,000 companies.
• Implementation delay: Advocates for a 2-year postponement for mid-caps and SMEs.
• Value chain cap: Supports limiting subcontractor reporting requirements to protect SMEs.

France: A balanced approach

• Mid-cap category: Recommends a dedicated mid-cap standard (LSME) with simplified ESG disclosures.
• Opposes scope reductions: Argues that excluding mid-caps could increase fragmented ESG data requests from clients.
• Sectoral standards: Promotes voluntary sector-specific standards for 1-2 years before mandatory implementation.

Sweden: Focus on business competitiveness

• Opposition to delays: Sweden opposes Germany's 2-year delay, emphasizing regulatory stability for businesses that have already invested in compliance.
• Pro-standardization: Supports streamlined ESG reporting standards to reduce reporting costs and complexity.
• Sectoral guidance: Agrees with France on sectoral standards but advocates for clearer guidance for SMEs.

Key changes in the Omnibus package

Here’s a look at the changes that the Omnibus package proposed:

• A proposal for a directive amending the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (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

EU Omnibus package: Before and after

Corporate Sustainability Reporting Directive (CSRD)

Corporate Sustainability Due Diligence Directive (CSDDD)

EU Taxonomy Disclosures

Carbon Border Adjustment Mechanism (CBAM)

InvestEU Regulation

How to prepare for global implications

The Omnibus package marks a pivotal shift in EU sustainability reporting, driving transparency and standardization across industries. Its reach will extend beyond the EU, shaping global ESG expectations and Prophix can help businesses navigate these global implications with ease. By centralizing ESG data from multiple systems and automating consolidation processes, Prophix ensures compliance with evolving EU standards while reducing administrative burdens. Its advanced analytics and interactive dashboards provide actionable insights, enabling organizations to align with global ESG expectations and maintain a competitive edge in an increasingly sustainability-focused market.

This post has been updated following the Omnibus announcement of the EU Commission on February 26, 2025.