Your Omnibus questions answered: Key takeaways from EU experts

The European Commission introduced them to address concerns about administrative burdens and provide additional time for mid-sized businesses to comply. But before we begin, it is important to note that the Omnibus proposals have only recently been revealed. As such, much of what we share below should be viewed as projections, but not hard and fast oncoming measures.

The proposal includes two major elements:

1. A ‘stop-the-clock’ measure, which may delay CSRD reporting deadlines for certain companies by two years.
2. A broader review of the CSRD, which includes an increase in the company size threshold, raising the reporting obligation from 250 to 1,000 employees.

These changes could affect whether and when your company needs to report, but sustainability experts strongly advise against pausing preparation efforts. The market, investors, and value chain partners still expect ESG transparency, even if legal obligations shift.Below, we break down the key questions companies asked our team of EU experts during our live webinar: “EU sustainability reporting ‘Omnibus’: What we know so far”.

What are the Omnibus proposals, and why were they introduced?

The Omnibus proposals are a revision of the Corporate Sustainability Reporting Directive (CSRD) aimed at simplifying reporting requirements and extending deadlines for mid-sized businesses. The European Commission introduced this initiative in response to concerns that CSRD compliance timelines were too aggressive, especially for small and mid-sized companies.

At its core, the proposals seek to strike a balance between ensuring high-quality ESG disclosures and reducing the administrative burden on businesses.

Key elements of the proposals include:

• A two-year delay in CSRD reporting requirements for certain mid-sized companies (so-called Wave 2 and 3 companies).
• An increase in the employee threshold for mandatory reporting from 250 to 1,000 employees.
• Refinements to the European Sustainability Reporting Standards (ESRS), including possible simplifications.

Although these changes reduce immediate compliance pressure, businesses should not assume they are free from sustainability reporting expectations. Moreover, it is important to note that the proposals are only drafts at this stage, and need to undergo discussions and amendments in the European Parliament and Council.

Who may still be required to report under the proposals?

The “stop the clock” proposal does not change the scope of companies in scope. The scope is revised in the broader CSRD review, where the scope is limited to:

• Large companies that have >1000 employees and at least one of the two criteria:
  1. Turnover > €50million
  2. Balance sheet > €25M

* Based on the proposal, these companies will report based on simplified ESRS standards

• Companies that fall out of scope are still encouraged to report based on upcoming voluntary standards. 
• Non-EU companies’ scope is also impacted (see question 5. How might the Omnibus proposals affect non-EU companies?)

Important note: Even if a company is no longer legally required to report, most will still be expected to provide ESG data to investors, banks, and supply chain partners. It is very important to keep focusing on the value of sustainability beyond compliance, both for value creation and also for risk management and efficiency.

How does the ‘stop-the-clock’ proposal affect CSRD timelines?

The ‘stop-the-clock’ proposal foresees delays of the sustainability reporting deadlines for “Wave 2” and “Wave 3” companies by two years:

• Wave 2 companies (i.e. large companies  – with securities on an EU market, including non-EU companies or private companies – that do not fall under the scope of NFRD) will have their reporting start date postponed from FY 2025 to FY 2027.
• Wave 3 companies (i.e. listed SMEs) will see their start date shift from FY 2026 to FY 2028.

The “stop the clock” proposal is an intermediate step for companies, as according to the broader CSRD review, companies with less than 1000 employees will fall out of scope. 

Why this matters: Businesses should not assume they are off the hook. Delayed reporting still means companies must prepare, and many firms will choose to report voluntarily to maintain market credibility. Moreover, again, it is important to note that these delays are not confirmed yet; the EU legislative process needs to be concluded first.

“The EU is changing its tactics, but it’s not changing its commitment to sustainability. The spirit of the EU legislation to push for transparency and non-financial data is and will stay intact.”

Tsvetelina Kuzmanova, Sustainable Finance Lead, Cambridge Institute for Sustainability Leadership, Europe

If my company may no longer be required to report, should we still prepare for ESG disclosures?

Even if the proposals remove your company from mandatory CSRD reporting, investors, financial institutions, and business partners will still expect ESG data.

• Buyers will continue asking for sustainability disclosures from suppliers to meet their own reporting obligations.
• Financial institutions may require ESG data for credit risk assessments and investment decisions.
• Customers and employees increasingly expect corporate sustainability transparency.

Finally, we should not forget that collecting and analyzing high-quality non-financial data is a key element to ensure any company can master the sustainable transition successfully. To create and protect value, and manage risks effectively, non-financial data is essential. Avoiding compliance myopia is paramount.

“Regardless of legal requirements, companies should still complete a double materiality assessment and build a strong ESG data foundation. These are ‘no-regret’ moves that add long-term value.”

Julia Staunig, Chief Growth Officer, Position Green

How might the Omnibus proposals affect non-EU companies?

The scope for non-EU companies has also changed:

Non-EU companies with securities listed in the EU need to report based on ESRS simplified standards if they have > 1,000 employees and meet one of the following criteria:

• Net turnover > €50 million 
• Balance sheet > €25 million 

The timeline for reporting has shifted from FY2025 (if the company is considered large) /FY2026 (if the company is a listed SME) by 2 years. 

Non-EU parent companies with significant activities in the EU will need to report based on Non-European Sustainability Reporting Standards, if, at the group level, the net turnover generated in the EU is > €450 million and has:

• At least one EU subsidiary is considered “large”, i.e. meeting two of three criteria:
  • Net turnover > €50 million 
  • Balance sheet > €25 million
  • Employees > 250 
• OR an EU branch that generates a net turnover of more than €50 million 

Note: The timeline for reporting has not changed (i.e. it is maintained in FY2028).

Will the Omnibus proposals impact the ESRS sustainability reporting standards?

Yes, while the Omnibus proposal primarily focuses on reporting thresholds and timelines, it also lays the groundwork for ESRS revisions. The European Commission is expected to:

• Reduce mandatory data points, focusing on the most critical sustainability metrics.
• Prioritize quantitative over narrative-based reporting, making ESG disclosures more data-driven.
• Improve alignment with global reporting standards, such as ISSB (International Sustainability Standards Board) and GRI (Global Reporting Initiative).

What this means for businesses: While some reporting obligations may be simplified, the core ESG principles and data expectations will remain. For example, double materiality is expected to remain a core pillar.

What should companies do next?

Even with potential reporting delays, businesses should not pause their sustainability reporting efforts.

“The advice would be to keep a cool head. The next weeks will be very decisive for the pace and direction of this proposal. Assess whether you will be caught eventually anyway. For many companies, it’s just a matter of when, not if.”

Elisabeth Ottawa, Head of Public Policy, Europe, Schroders

Here’s how to stay ahead:

1. Stay the course with CSRD preparation

Even if your reporting deadline might be postponed, investors, banks and supply chain expectations for sustainability transparency remain high. Other stakeholders, such as employees and Boards, also have increasingly high expectations of non-financial data.

2. Conduct a double materiality assessment (DMA)

This is the most critical foundation for ESG reporting. A DMA helps companies identify material sustainability risks and opportunities, making future reporting much easier and more strategic.

3. Prioritize high-quality ESG data collection

Accurate carbon accounting (Scope 1, 2, and 3 emissions) and quantitative ESG metrics will remain critical for compliance and market credibility.

4. Monitor regulatory updates and prepare for different outcomes

The final version of the Omnibus proposal is still under discussion. Companies should stay informed and be prepared for different compliance scenarios.

What should businesses do next?

1. Continue sustainability reporting efforts

Even if obligations are delayed or reduced, ESG expectations from investors, stakeholders, and supply chains remain strong. Companies should continue developing sustainability strategies and avoid last-minute compliance stress.

2. Conduct a double materiality assessment

Regardless of whether CSRD reporting is required, companies should assess their sustainability risks and opportunities through a double materiality assessment (DMA). This will ensure that businesses understand what sustainability issues matter most to them and their stakeholders.

3. Prioritize high-quality quantitative ESG data

Investors and regulators are increasingly focused on hard data. Companies should ensure they have accurate carbon accounting (Scopes 1, 2, and 3) and track key sustainability KPIs. Even companies exempt from CSRD may still face data requests from partners and financial institutions.

4. Stay informed on regulatory updates

The final version of the Omnibus proposal is still in the legislative review process. Businesses should stay updated and prepare for different regulatory outcomes. Position Green’s advisory team can help companies navigate these changes efficiently.

Final thoughts: Sustainability reporting remains a business priority

While the Omnibus proposal introduces delays and threshold changes, sustainability reporting remains a key business priority. Companies that take proactive steps now—by investing in ESG data, conducting materiality assessments, and preparing for future disclosures—will be in a stronger position for regulatory compliance and market competitiveness.For expert guidance, book a session with Position Green’s sustainability advisors today to get your personal check on whether or not your reporting strategy needs to change!