On 16 December 2025, the European Parliament adopted the Omnibus I Simplification Package, introducing binding changes to the CSRD and CSDDD that significantly narrow their scope and simplify sustainability reporting and due-diligence obligations. The package raises applicability thresholds, removes sector-specific ESRS mandates, excludes listed SMEs from mandatory CSRD reporting, and limits CSDDD obligations to only the largest EU and non-EU companies.
On 16 December 2025, the European Parliament formally adopted the Omnibus I Simplification Package, introducing binding amendments to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). The adoption marks a significant recalibration of the EU sustainability regulatory framework, narrowing scope, simplifying obligations, and adjusting reporting and due-diligence requirements for companies.
Omnibus I forms part of the European Commission’s broader legislative simplification agenda and focuses specifically on corporate sustainability reporting and due diligence.
1. Key Changes to the CSRD
- Revised scope thresholds
- Mandatory CSRD reporting applies only to:
- EU companies with more than 1,000 employees and €450 million in net turnover
- Non-EU companies with net turnover in the EU exceeding €450 million.
- Branches or subsidiaries of non-EU companies with net turnover in the EU exceeding €200 million.
- Temporary exemption for certain Wave 1 companies
- Wave 1 companies that fall below the new thresholds may be exempted from reporting for FY 2025 and FY 2026.
- This exemption is optional, subject to national transposition, and not automatic.
- Exclusion of listed SMEs
- Listed SMEs are removed from mandatory CSRD reporting.
- They may instead apply the ESRS VSME (Voluntary SME Standard).
- Sector-specific standards removed
- The mandate for sector-specific ESRS has been removed.
- The development of sector-specific guidance remains under consideration.
2. Key Changes to the CSDDD
- Narrowed scope
- Due-diligence obligations apply only to companies with:
- More than 5,000 employees, and
- Over €1.5 billion in annual net turnover.
- For non-EU companies, the threshold is €1.5 billion in EU-generated turnover.
- Removal of climate transition plan requirement
- The obligation to adopt a climate transition plan under the CSDDD is removed.
- Under CSRD, companies must still disclose a transition plan if they have one.
- Removal of EU-wide civil liability regime
- Harmonised EU civil liability provisions are deleted.
- Liability will be governed by national law.
- Administrative fines are capped at 3% of global net turnover.
- Risk-based due-diligence approach retained
- Due diligence remains risk-based.
- Initial assessments focus on identifying the most likely and severe adverse impacts, with deeper investigation required where risks are identified.
3. Next Steps
- The text now requires formal approval by the Council.
- The directive will enter into force 20 days after its publication in the Official Journal of the European Union.