EU adopts major reforms to streamline CSRD sustainability reporting

The Omnibus Directive narrows scope and introduces new reliefs to reduce reporting complexity for large companies.

The EU’s Omnibus Directive amending the Corporate Sustainability Reporting Directive (CSRD) is now in force, marking the most substantial reset of EU sustainability reporting since the framework was introduced. Member States must transpose the changes by 19 March 2027.

The reform narrows mandatory reporting to only the largest companies — those with more than 1,000 employees and over EUR 450 million in turnover — removing listed small and medium-sized enterprises (SMEs) from scope and sharply reducing the number of entities required to report. Revised timelines introduced under earlier “stop‑the‑clock” measures remain, with Wave 2 reporters still in scope starting in FY2027. Additional reliefs further reduce burden, including higher thresholds, protections for smaller suppliers through a new value‑chain cap, enhanced confidentiality provisions, and simplified assurance requirements.

The changes also pave the way for upcoming technical standards: simplified European Sustainability Reporting Standards (ESRS), a voluntary SME reporting framework, digital tagging rules, and non‑EU reporting standards, all expected between 2026 and 2027.

Together, these adjustments recalibrate the CSRD to focus regulatory effort on the largest undertakings, while enabling others to opt into a lighter voluntary framework aligned with market expectations.