Omnibus Package Approved: What Changes for the CSRD and CSDDD Directives

After months of intense debate, the European Parliament has approved the final agreement on the Omnibus Package, resulting from the trilogue between the European Council, the European Commission, and the European Parliament. First presented on 26 February 2025 by the European Commission, this package now significantly amends several key directives of the European Green Deal.

The Corporate Sustainability Reporting Directive (CSRD), which governs corporate sustainability reporting, entered into force on 5 January 2023, while the Corporate Sustainability Due Diligence Directive (CSDDD), which introduces due diligence obligations relating to human rights and the environment, entered into force on 25 July of the same year.

Now, only a few years later, the Omnibus Package profoundly redefines their scope of application.

The new agreement reshapes the regulatory landscape, introducing significant changes to both directives.

• The new thresholds for the CSRD are set at 1,000 employees (FTE) and €450 million in net turnover. For the CSDDD, the thresholds increase to 5,000 employees and €1.5 billion in turnover.

• The obligation to implement Climate Transition Plans, previously included in the CSDDD, has been removed.

• Value Chain Cap: the agreement limits the amount of information that companies may request from smaller enterprises within their supply chains, allowing companies with fewer than 1,000 employees to refuse to provide sustainability reporting information beyond what is required under the voluntary sustainability reporting standard for SMEs (VSME).

• The approach to due diligence has changed. The exclusive focus on tier-one suppliers has been eliminated: companies will be required to concentrate on those areas of the value chain where negative impacts are most likely, without the need for full mapping, but rather through a scoping exercise. Furthermore, where impacts are equally severe across different areas, companies may prioritise direct business partners.

• The transposition of the CSDDD has been postponed by a further year. In-scope companies will be required to comply by July 2029.

The new agreement drastically reduces the number of companies subject to the two directives. For the CSRD, the scope decreases from approximately 47,000 companies to around 4,700 — a reduction of 90%. For the CSDDD, the reduction is about 70%, from approximately 7,000 companies to just over 2,000.

While many companies had called for a simplification of requirements and standards, such a sharp reduction in scope carries the risk of lower comparability and transparency in the market — including for investors — and may limit the ability of some companies to showcase the value of their sustainability performance to these stakeholders.

It is important to highlight that the Omnibus agreement includes a clause providing for a possible future extension of the scope of both the CSRD and the CSDDD. This provision suggests that legislators themselves have doubts about the severity of the reductions, leaving future scenarios open.

Climate Transition Plans remain part of the Corporate Sustainability Reporting Directive, which requires companies to report on their climate transition strategies. A different approach has been taken within the CSDDD, where the obligation to implement such plans has been removed. The European Central Bank has clarified that requiring only the adoption — without actual implementation — of Climate Transition Plans entails risks of ambiguity, greenwashing, and inefficient capital allocation, undermining both market trust and effective consumer protection. Moreover, in the absence of reliable and comparable data on the actual execution of decarbonisation strategies, companies — especially SMEs — risk being perceived as high climate-risk entities and therefore being excluded from financing opportunities. In this context, voluntary corporate leadership will be crucial.

For Large Companies: Assess Your Scope

Large companies should first verify whether they still fall within the scope of the amended directives. With regard to the Corporate Sustainability Reporting Directive, it is crucial to monitor the simplification of the ESRS standards: EFRAG has proposed a significant simplification, reducing data points by 70%, from 1,073 to just 320. The revision of the standards is now in the hands of the European Commission, which will carry out internal and external consultations and engage with the Parliament and the Council. The EU’s objective is for the revised standards to apply from the 2027 financial year, with a possible early application already in 2026 (still to be confirmed).

For Companies Outside the Scope

Even though the CSRD and the CSDDD are changing, stakeholder expectations remain unchanged — particularly those of business partners, investors, and banks. This simplification does not alter the fact that sustainability remains a matter of competitiveness, access to capital, supply chains, talent, and reputation. What changes is the legal perimeter, not the direction of the market: being out of scope does not mean being out of the market.

In this scenario, intentional corporate action based on a robust transformation strategy, governance that integrates economic, environmental, and social impact considerations into all decision-making processes, and access to high-quality business data remains essential. This is why continued investment in sustainability remains important — as demonstrated by the many SMEs across Europe that are already doing so.

With regard to transparency and reporting, EFRAG has already developed voluntary standards for companies outside the CSRD — the VSME (Voluntary Standard for SMEs). These standards, simplified compared to the ESRS, enable companies to:

• Provide information that meets the data needs of large companies requesting sustainability information from their suppliers;
• Respond to data requests from banks and investors, facilitating access to ESG ratings and credit;
• Be prepared and aligned for any future developments in European standards.

In a period of continuous regulatory change, it is essential to understand what is truly relevant for your company and what future developments may emerge in the market.

NATIVA can help you navigate this evolving landscape and support you in guiding your sustainability strategy, balancing the ambition to generate economic, social, and environmental value with compliance and transparency obligations.

We offer deep expertise in sustainability and business transformation, as well as in European regulation, having supported numerous companies — including OVS, Italcer, and Kiton — in their CSRD reporting processes.