Simplification and reduction of the sustainability reporting

On 26 February 2025, the European Commission (EC) proposed a set of changes in the corporate sustainability reporting (Corporate Sustainability Reporting Directive – CSRD and the EU green taxonomy), the Corporate Sustainability Due Diligence directive – CSDDD, and the carbon border adjustment mechanism – CBAM. For the implications of CBAM we refer to our publication.  

The Omnibus proposal on the CSRD, EU green taxonomy and CSDDD aims to: 

• Reduce the number of companies in scope
• Further phase-in the implementation 
• Simplify the reporting standards and reduce the responsibilities in the value chain  

Please be aware that this is a proposal that needs to go through the legislative process. This means there may be changes from the current proposals. These Directives first will enter into force only once the European Parliament and the Council have reached an agreement on the proposal and after publication in the Official Journal of the EU (OJEU). Member States will then have to adopt these provisions by transposing the Directives into national law.  

Despite these relaxations, the Green Deal’s sustainability goals and the transition to a more sustainable economy remain unchanged. While some companies may no longer have to report, large suppliers, customers and financial institutions will still have to insure sustainability in their supply chains. The continuing ‘push’ will also be reinforced by legislation and a focus from other stakeholders.  

We therefore advise you to still identify key impacts and financial risks and opportunities. These insights are needed, not for reporting or compliance purposes. They are important to prepare your company for the future, to make solid long-term business decisions.  

The key proposals explained 

Reduce the number of companies in scope 

• CSRD and EU green taxonomy – The current CSRD and EU green taxonomy is applicable for all large EU companies. A company is large when it meets two out of three of the next criteria; €50M revenue, €25M balance sheet total or 250 employees. For non-EU companies with an EU revenue of €150M or more only the CSRD is applicable. For EU companies, the proposed scope for the CSRD is now changed to large EU companies with 1000 employees or more and for the EU green taxonomy to large EU companies with 1000 employees and €450M revenue or more. The proposed scope for non-EU companies concerns €450M EU revenue or more.  

Further phase-in the implementation 

• CSRD and EU green taxonomy - To be implemented in four waves. The Omnibus suggests adjusted timelines for wave two and wave four (with adjusted scope as discussed before). Companies within wave three will no longer be covered by the CSRD. Below you can find the timeline under the current directive, and the suggested timeline. Please note that the original timelines are based on the EU directive and are not transposed into Dutch Law. 

• CSDDD - The CSDDD would become applicable in three waves. The first wave of the CSDDD will be postponed and combined with wave two. Below you can find the timeline under the current directive, and the suggested timeline. Please note that the CSDDD is not yet transposed into Dutch Law. 

Simplify the reporting standards and reduce the responsibilities in the value chain 

The Omnibus proposes to simplify the CSRD, the EU green taxonomy and the CSDD and make them more manageable for companies in scope: 

• Simplification of European Sustainability Reporting Standards - ESRS: the European Sustainability Reporting Standards (ESRS) will be simplified and streamlined, in particular by reducing the number of mandatory data points and prioritizing quantitative data points over narrative information. Sector-specific standards will not be implemented. 
• Simplification of the EU green Taxonomy:  For large EU companies with 1000 employees and a revenue over €450M, a materiality threshold will be implemented. If the economic activities are less than 10% of a company's total, an eligibility and alignment scan does not have to be performed.  For large EU companies with more than 1000 employees, but a revenue of less than €450M, the taxonomy is voluntary. If a company wants to report alignment, it can choose to report only on revenue and CapEx and claim partial alignment to make the EU green taxonomy less burdensome. 
• Value chain cap on the data collection: limits the data companies can request from other companies in their value chain if they have less than 1000 employees. 
• Cap on Value chain responsibilities: Companies should go towards tier one value chain impact and only further into the value chain for plausible adverse impacts. 
• Assurance requirement: the possibility of changing to reasonable assurance requirements is removed. The EC also proposes to issue targeted assurance guidelines by 2026. 

How we can help 

At Forvis Mazars, we understand the complexities introduced by the EC’s Omnibus proposal on corporate sustainability reporting. Our comprehensive sustainability services are designed to help you navigate regulatory changes as they continue to develop. Not only for the EU sustainability legislation. Also to put it into context and ensure integration with other important sustainability frameworks.  

By leveraging our extensive experience and tailored solutions, Forvis Mazars can support you in driving sustainable growth, enhancing transparency, achieving compliance, and safeguarding accurate reporting amidst the volatile sustainability landscape. 

ESG strategy & transformation: as the Omnibus proposals introduce new thresholds and timelines, our experts assist in developing and implementing strategies aligned with best practice ESG principles, enabling you to integrate sustainability seamlessly into your core operations. With the extended timelines, you will have more time to prepare and ensure a smooth path to external reporting and implementation of your sustainability strategy.  

Reporting & assurance: with the proposed directives aiming to simplify and modify reporting requirements, our audit and assurance solutions support your roadmap to sustainability reporting.