Sweden’s CSRD changes: what the Omnibus proposal means for ESRS and reporting scope

The reasoning behind this approach is largely economic, strategic, and political. Swedish policymakers are prioritizing competitiveness and reducing administrative burden, particularly for mid-sized companies that were previously expected to come into scope. Rather than maintaining a broader national interpretation of CSRD, Sweden is aligning closely with the lowest required EU thresholds.

At the same time, the proposal reflects a more pragmatic view of ESRS adoption. Instead of treating ESRS as a universal compliance framework, the Swedish model distinguishes between companies that must comply and those that are expected to engage voluntarily. This creates a two-speed system where ESRS remains central for large companies, while smaller companies are guided toward simplified, voluntary standards.

A narrower scope by design

The most significant change is the sharp reduction in the number of companies required to report under CSRD.

Under the proposal, only companies exceeding both of the following thresholds will be in scope:

• More than 1,000 employees
• More than SEK 4.9 billion in net revenue

This represents a substantial increase from current thresholds and removes the obligation for listed SMEs entirely.

In practice, this means that a large share of companies that were preparing for CSRD will no longer be legally required to report. Estimates suggest that only around 150 to 200 Swedish companies will remain in scope.

The logic is consistent with the Omnibus directive. The burden of mandatory reporting is intended to sit with companies that have both the greatest impact and the greatest capacity to comply.

A pause and a reset in timelines

The proposal also introduces a differentiated timeline across reporting waves.

Wave 1 companies that no longer meet the new thresholds are exempt from reporting for the 2026 fiscal year

Companies that remain in scope are expected to begin reporting under the revised framework from 2027

This creates a temporary pause for many organizations, but not a full stop. The regulatory direction remains intact, even if the immediate pressure is reduced.

Many companies exit scope permanently

For Wave 2 and Wave 3 companies, the implications are more structural.

Most will never enter the mandatory CSRD regime under the proposed thresholds. Instead, they are expected to rely on voluntary sustainability reporting standards developed at the EU level.

For those affected by this change, however, there is a significant risk of exposure by opting out of compliance wholesale, or reducing their reporting burden below the expectations of larger (in-scope) stakeholders and banks. Most larger organizations will still be as compliant as ever, and will expect stakeholders to mirror this ambition both for ease of data integration and reporting.

This is where Sweden’s approach becomes particularly distinct. By explicitly directing companies toward voluntary frameworks, the proposal acknowledges that sustainability reporting will continue to matter even outside regulatory scope.

The expectation is not that reporting disappears, but that it becomes market-driven rather than compliance-driven.

A clear limit on value chain demands

One of the more operationally significant changes concerns value chain reporting.

Under the proposal, companies in scope will only be able to request sustainability information from smaller companies in their value chain to the extent defined by EU voluntary standards.

This introduces several practical implications:

• Smaller companies gain a formal basis to limit excessive data requests
• Reporting companies must clearly distinguish between mandatory and non-mandatory data requests
• Contractual clauses that go beyond these limits may be considered invalid
• The intention is to prevent indirect regulatory pressure from cascading through the value chain.
• At the same time, this does not remove value chain transparency altogether. It standardizes and limits what can be requested.

What remains unchanged

Despite the reduction in scope, several core elements of CSRD remain intact.

• Large companies will still be required to report in line with ESRS
• Sustainability reporting will remain subject to audit requirements
• Investors and stakeholders will continue to expect comparable and reliable data
• In other words, the strategic importance of sustainability reporting does not disappear. It becomes more concentrated.

Disclaimer: The legislative process is still ongoing

It is important to note that the proposal is not yet final. The consultation process is open until August 21, 2026, and a final report is expected by September 29, 2026. Any legislative changes may still evolve before being adopted, with parliamentary decisions potentially taking place later in 2026.

What this means in practice

Sweden’s proposal signals a shift from broad compliance to more targeted regulation. For companies exiting scope, the challenge is not whether to report, but how to maintain credibility without regulatory pressure.

For companies remaining in scope, expectations will increase. Scrutiny will be higher, and alignment with ESRS will become more important.

Across the market, sustainability data will continue to flow through value chains, investor requirements, and commercial expectations.

The regulatory burden may decrease. The strategic importance does not. And for those looking to ensure they are out of scope, but not out of sight, Position Green’s team are already adapting to the Simplified ESRS standards being set and settled by EFRAG in the coming months.

Don’t let the regulatory changes curb your impact

Sweden’s regulatory shift changes the compliance picture, but not the strategic one. Position Green’s team is already adapting to the Simplified ESRS standards being set by EFRAG. We’re excited and keen to help affected companies navigate these changes and ensure their strategic sustainability initiatives continue through and beyond compliance.