The European Union has officially released the Omnibus Regulation on 26 February 2025, which aims to streamline and simplify existing sustainability reporting frameworks. This initiative seeks to reduce administrative burdens on businesses while maintaining the integrity of ESG standards.
Key objectives of the omnibus regulation
- Consolidation of Reporting Requirements: The regulation intends to harmonize overlapping obligations from directives such as the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy Regulation. This consolidation aims to create a more coherent and manageable reporting landscape for companies operating within the EU.
- Reduction of Scope: The number of companies subject to mandatory reporting will be reduced by approximately 80%.
- Reduction of Administrative Burden: A significant goal is to decrease administrative burdens by 25% and at least 35% for SMEs before the end of the mandate, focusing on eliminating redundancies and overlaps that are creating unnecessary burdens for EU businesses without compromising the quality and substance of the information disclosed.
- Enhancement of Competitiveness: By streamlining reporting processes, the EU aims to bolster the global competitiveness of European industries, ensuring that sustainability efforts align with economic growth and innovation.
Key changes to the CSRD
Increased reporting thresholds
The directive limits mandatory sustainability reporting to large undertakings with more than 1,000 employees that also have either:
- A net turnover exceeding €50 million, or
- A balance sheet above €25 million.
This is a substantial increase from the original threshold of 250 employees and €40 million turnover or balance sheet of €20 million.
Non-EU companies will need to comply with the CSRD reporting regulations if they generate over €450 million net turnover within the European Union and have an EU subsidiary or branch that meets the reporting criteria for EU companies.
Sector-specific standards
The directive removes the requirement for the Commission to adopt sector-specific reporting standards, avoiding an increase in the number of prescribed data points that undertakings should report.
Assurance requirements
Currently, the CSRD mandates limited assurance of sustainability reporting. The directive deletes the obligation for the Commission to adopt standards for sustainability assurance by 2026 and removes the possibility of moving to reasonable assurance. Instead, the Commission will issue targeted assurance guidelines by 2026, providing clarity on requirements without increasing costs.
Value chain reporting
Originally, the CSRD mandated that companies disclose sustainability information about their entire value chain, which had raised concerns about compliance burdens—particularly for smaller suppliers. The directive exempts companies from collecting information from suppliers who are not subject to CSRD reporting requirements—basically all undertakings with less than 1,000 employees. Instead, the Commission will introduce voluntary reporting standards for smaller entities to ensure proportionality in disclosures.
Reducing data points for reporting
The Commission will adopt a delegated act to revise the first set of ESRS. This revision will substantially reduce the number of mandatory datapoints by removing those deemed least important, prioritizing quantitative datapoints over narrative text, and further distinguishing between mandatory and voluntary datapoints
Optional taxonomy reporting
The directive introduces an 'opt-in' regime for taxonomy reporting. Large undertakings with more than 1000 employees but with net turnover not exceeding €450 million that claim their activities are aligned with the EU Taxonomy shall disclose their turnover and CapEx KPIs, with OpEx reporting being optional.
Double materiality
While some internal discussions suggested removing the double materiality requirement (which considers both financial and impact materiality), the directive does not include this change. This means companies must continue assessing both the financial impact of sustainability factors and their broader societal and environmental implications.
Key changes to the CSDDD
Extended timeline for implementation
Companies get one extra year to implement the framework. Transposition deadline moved to 26 July 2027, and first phase application for largest companies to 26 July 2028. Guidelines advanced to July 2026 to reduce reliance on legal advisory services.
Limited due diligence on indirect partners
Companies are relieved from systematic in-depth assessments of indirect partners in complex value chains. Full due diligence beyond direct partners is only required if plausible adverse impact evidence exists.
Simplified due diligence requirements
Reduces compliance burden and costs by:
- Extending periodic assessment intervals from 1 to 5 years,
- Clarifying due diligence update triggers,
- Streamlining stakeholder engagement obligations, and
- Removing the mandatory termination of business relationships as a last resort.
Reduced trickle-down effect on SMEs
Reducing the trickle-down effect further by limiting the information that companies within scope may request from their SME and small midcap business partners (i.e. companies with not more than 500 employees) to the information specified in the CSRD voluntary sustainability reporting standards (VSME standard). This limitation applies unless they need additional information to carry out the mapping (for instance on impacts not covered by the standards) and they cannot obtain that information in any other reasonable way.
Deference to national civil liability laws
Deferring to the various national civil liability regimes by deleting the harmonised EU conditions for civil liability and revoking the obligation for Member States regarding representative actions by trade unions or NGOs. Leaving national law to define whether its civil liability provisions override otherwise applicable rules of the third country where the harm occurs
Alignment with CSRD transition plans
Climate transition plan requirements will align with CSRD standards.
More harmonization across the EU
Extending maximum harmonization to more provisions regarding core due diligence obligations to better ensure a level playing field across the EU.
Financial services review clause removed
Deletes the review clause on whether financial services should be included in the due diligence directive.
Key changes to the EU Taxonomy
Voluntary Taxonomy reporting
Large companies (>1,000 employees) with net turnover ≤ €450 million can voluntarily report Taxonomy alignment, reducing the number of companies obliged to report.
Standardized reporting framework
The Commission will develop delegated acts to standardize content and presentation of Taxonomy reports.
Simplified reporting templates
Data points in reporting templates reduced by almost 70%, significantly easing compliance burdens.
Exemption for non-material activities
Companies don’t need to assess Taxonomy-eligibility and alignment of their economic activities that are not financially material for their business (≤10% of total turnover, capex, or assets).
Adjustment to Green Asset Ratio (GAR) for banks
Banks can exclude exposures to companies (<1,000 employees) not under CSRD scope from the denominator of their GAR calculation.
Simplification of "Do No Significant Harm" (DNSH) criteria
The Commission is consulting on two alternative options to simplify pollution prevention and chemical use DNSH criteria. Stakeholders are invited to provide feedback.
Key takeaways for businesses
- Stay informed and engaged. Businesses should closely monitor developments related to the Omnibus Regulation to understand how changes may impact their reporting obligations and compliance strategies.
- Assess current reporting practices. Evaluate existing sustainability reporting processes to identify areas of potential simplification and ensure alignment with the forthcoming consolidated requirements.
- Leverage technological solutions. Adopting digital tools and platforms can enhance efficiency in data collection and reporting, aiding in compliance with streamlined regulations.
- Prepare for transition. With the directive now reducing reporting burdens, companies should be proactive in adapting to the new framework, ensuring a smooth transition without disruption to reporting cycles.
The EU's Omnibus Directive represents a significant shift towards more efficient and business-friendly sustainability reporting. By proactively engaging with these changes, companies can not only ensure compliance but also enhance their competitive edge in a sustainability-conscious market.
How can Pulsora help?
As the EU Omnibus Directive introduces significant changes to sustainability reporting, Pulsora provides a comprehensive ESG SaaS solution that helps companies navigate these evolving requirements with efficiency and accuracy. Our platform supports businesses in streamlining their sustainability disclosures, ensuring compliance with consolidated frameworks such as CSRD, CSDDD, and the EU Taxonomy Regulation while reducing administrative burdens.
Centralized ESG data management
Pulsora enables companies to efficiently set up and manage reporting obligations, ensuring a structured and transparent approach to sustainability reporting. By consolidating disclosures from different frameworks into a single platform, businesses can reduce duplication, improve data consistency, and enhance overall reporting efficiency.
Dynamic framework mapping and reporting automation
With automated metric mapping, Pulsora links overlapping ESG metrics across CSRD, GRI, SASB, CDP, and the EU Taxonomy, ensuring that data collection happens once and can be used to report across multiple frameworks. This capability eliminates the need for redundant reporting efforts, aligning with the Omnibus Regulation’s goal of reducing compliance costs and administrative complexity.
Compliance readiness and ESG data insights
Through real-time analytics and tracking, companies can assess their readiness for upcoming regulatory changes. Our platform’s gap analysis and materiality assessment tools help companies understand which disclosures are mandatory, subject to materiality, or voluntary under evolving EU regulations. Additionally, historical reporting views allow companies to compare disclosures over time, ensuring transparency and progress tracking.
Digital-first approach and seamless integrations
Pulsora leverages API integrations to facilitate direct submissions to frameworks like CDP, EDCI reducing manual data entry and enhancing efficiency. Additionally, bulk data upload/download features and input mapping ensure that companies can quickly adapt to new requirements without disrupting existing workflows.
Future-proofing sustainability reporting
As the Omnibus Regulation evolves, Pulsora remains adaptive—continuously updating its framework catalogs, disclosure modules, and compliance automation features to align with the latest regulatory developments. Companies leveraging Pulsora can ensure they remain ahead of compliance deadlines, seamlessly integrating updates into their sustainability strategies without additional administrative burden.
Start preparing for CSRD today
With the EU’s push for simplified, technology-driven sustainability reporting, Pulsora provides businesses with the tools to not only meet compliance requirements but also enhance their ESG strategy, unlocking competitive advantages in a sustainability-conscious market.
