The Omnibus Package: a shift in reporting dynamics to enhance the value of sustainability 

In recent weeks, the financial and sustainability reporting landscape has been abuzz with discussions surrounding the European Commission’s Omnibus Package. Numerous perspectives have emerged, with some viewing the initiative as a game-changer, while others remain skeptical about its implication. What is clear is that the package proposes significant simplifications, that could allow companies to focus on ESG transformation and their low-carbon journey.

On 26 February, the European Commission introduced its first Omnibus Package, an initiative aimed at simplifying sustainability reporting as part of its broader objective to reduce reporting burdens by 25%, with SMEs set to benefit from an even greater reduction of 35 %¹. The frameworks subject to these potential amendments are the Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy, the Corporate Sustainability Due Diligence Directive (CS3D) and the Carbon Border Adjustment Mechanism (CBAM) with proposals such as:

• CSRD: The scope could be reduced by 80%, delaying reporting deadlines for smaller companies, eliminating sector-specific standards, maintaining limited assurance and streamlining ESRS by 2026.
• CS3D: Companies could assess only direct partners (excluding downstream activities), transition plans could require implementation outlines, and EU-wide liability could be removed.
• EU Taxonomy: A voluntary reporting option could be introduced, non-material activities (under 10% of financials) could be exempted, and mandatory data points could be reduced by 70%.
• CBAM: The Commission proposes further simplifications to reporting requirements and transitional measures to ease implementation for businesses².

The rationale behind these changes is allowing companies to focus on innovation and competitiveness while maintaining sustainability commitments. 

Impacts of the Omnibus package: Turning change into strategic advantage 

The proposed changes reshape sustainability reporting, offering more flexibility, cost savings, and extended timelines but also raising concerns about comparability, governance, and investor expectations. Several opportunities and risks emerge that businesses must consider as they navigate the evolving regulatory landscape.

Businesses that take a proactive approach can enhance resilience, unlock new growth avenues and build long-term stakeholder trust by capitalizing on several opportunities:

• Extended timeline for alignment: Companies have two additional years to align with reporting requirements, refine sustainability strategies, and leverage industry benchmarks for better compliance and performance.
• Cost savings and resource allocation: Companies no longer in scope can redirect compliance costs toward strategic sustainability initiatives driving long-term performance such as clean technology, innovating to Net Zero, or sustainability-driven business transformation.
• Beyond compliance, strengthening sustainability impact: Companies that embed sustainability into their strategy will be better prepared for future regulatory shifts, supply chain risks, and evolving stakeholder expectations.
• Competitive edge and market leadership: Companies that voluntarily maintain strong reporting practices can differentiate themselves, enhance brand reputation, attract sustainability-focused investors, and gain access to green financing and lower capital costs.

Nevertheless, reduced reporting requirements could lead to gaps in transparency, weakened comparability, and increased investor scrutiny, potentially impacting market confidence and long-term sustainability goals. Businesses must navigate several risks:

• Investor scrutiny and risk exposure: A reduced regulatory scope may create a gap between reporting requirements and investor expectations, increasing stakeholder scrutiny and the risk of deprioritizing key sustainability efforts.
• Less comparability and benchmarking: Fewer companies reporting could weaken data consistency, making cross-industry and cross-border comparisons difficult, potentially leading to the rise of fragmented reporting frameworks.
• Reduced structured oversight over sustainability reporting: Voluntary reporting lacks assurance mechanisms, raising concerns over data reliability, greenwashing, and inconsistent value chain disclosures.

Strategic actions: recommendations for navigating your sustainability journey

To successfully navigate these changes, companies will need to find a balance between leveraging new flexibilities and maintaining sustainability commitments. Regardless of how the legislation evolves, businesses should take proactive steps to ensure sustainability remains a core part of their strategy.

• Assess applicability and impact: Determine whether your company still falls under CSRD and whether voluntary disclosure aligns with investor and stakeholder needs.
• Benefit from the conducted Double Materiality Analysis: Continue evaluating financial and impact risks and opportunities to inform decision-making.
• Strengthen value chain engagement: Encourage voluntary disclosures from supply chain partners and align with CSRD-covered entities for reporting consistency and understand expectations.
• Embed sustainability for long-term resilience: Integrate ESG into governance and corporate strategy, strengthening internal expertise to navigate evolving regulations.
• Strengthen oversight and data reliability: Build robust data governance frameworks to ensure accuracy, reliability, and investor trust in sustainability reporting.
• Leverage technology for efficiency: Invest in data, risk, and reporting automation to streamline compliance and sustainability tracking.
• Align with leading ESG standards: Maintain credibility by adopting voluntary frameworks like VSME, UNGC, SDGs, GRI, ISSB, and TCFD. 

Staying ahead: preparing for the future of sustainability reporting

The legislative process for the Omnibus Package is now in motion, with the proposals set for review by the European Parliament and the Council. Additionally, the draft Delegated Act under the Taxonomy Regulation is open for public feedback before adoption.

While the Omnibus Package brings much-needed simplifications, sustainability reporting remains a crucial component of corporate transparency. Companies should not interpret these changes as a reason to halt their efforts. Instead, they should focus on re-scoping their reporting obligations — understanding the impact of the new requirements, the potential new timeline, and the ongoing importance of building a solid reporting infrastructure.

Companies that proactively adjust to these changes will be better positioned to navigate risks and seize opportunities of future regulatory developments and market expectations. While some organizations are choosing to pause and wait for further clarifications, the majority of EU undertakings continue working on their CSRD-related reports, using the directive as a foundation to structure their disclosures. Additionally, the simplification of the EU Taxonomy has been positively received, particularly by non-EU companies with significant business in the region. For them, the primary challenge remains data availability rather than the Taxonomy itself, which is widely recognized as a unified classification system and “common dictionary” of sustainable activities. 

Ultimately, the importance of non-financial disclosure regulations remains undisputed, particularly for investors who rely on these insights to drive decision-making. As a result, many companies are choosing to continue strengthening internal sustainability frameworks, ensuring they are well-positioned for future clarifications and regulatory developments. Rather than pausing efforts, now is the time to refine reporting strategies, leverage simplifications, and prepare for the evolving regulatory landscape. Sustainability reporting is a key strategic tool for long-term resilience and value creation, and it is here to stay — how we shape its future depends on how we act today.