First Omnibus proposal - navigating the future of sustainability reporting

7 March 2025

The first Omnibus proposal sets the stage for a long legislative process that could reshape corporate sustainability reporting. With new thresholds, timelines, and standards on the negotiation table, businesses across sectors may need to anticipate significant changes. Here, we explore these potential developments in detail, providing insights to help organisations confidently navigate the regulatory landscape in the making.

On 26 February 2025, the European Commission (EC) unveiled a set of proposals aimed to streamline corporate sustainability reporting, due diligence, and the carbon border adjustment mechanism. These changes are part of a broader effort to significantly reduce administrative burdens by 25% and by at least 35% for SMEs by 2029.

A starting point: these Directives will enter into force only once the European Parliament and the Council have reached an agreement on the proposalsand 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.

Key proposed Directives to amend the Corporate Sustainability Reporting Directive (CSRD)

"Stop the Clock" Directive

Purpose: this proposed directive aims to postpone reporting requirements for "wave 2" and "wave 3" companies by two years.
Impact: wave 2 and wave 3 companies will not start complying with requirements that could be modified with the adoption of the second Directive.

"Content" Directive

Purpose: this proposed directive seeks to amend the CSRD to make it more manageable for businesses.

Key changes

Scope reduction: fewer companies will be required to report, easing the burden on smaller businesses.
Value chain cap: limits the data that companies can request from other companies in their value chains if they have fewer than 1000 employees.
Simplification of standards: the European Sustainability Reporting Standards (ESRS) will be simplified and streamlined by notably reducing the number of mandatory datapoints and prioritising quantitative datapoints over narrative disclosures. Sector-specific standards will be removed.
Assurance requirement: the possibility to move to reasonable assurance requirements is removed. The EC also proposes to issue targeted assurance guidelines by 2026.

Legislative process and timeline

The "Stop the Clock" proposed Directive is expected to be adopted through a fast-track procedure, aiming for approval and transposition by 31 December 2025 at the latest. The "Content" proposed Directive will follow a normal legislative process, expected to take at least nine months, with Member States having 12 months afterwards to transpose the new provisions into national law.

Impact on Member States

As of January 2025, 19 Member States have already transposed the CSRD, requiring companies in these states to comply with existing laws until the two proposed Directives are adopted and transposed. The remaining eight states are expected to follow suit, ensuring a unified approach across the EU.

Once the “Stop the clock” proposed Directive is adopted and transposed, existing CSRD transposition laws would not be applicable to “wave 2” and “wave 3” companies before 2028 reporting.
Once the “Content” proposed Directive is adopted and transposed, existing CSRD transposition laws would be applicable to companies within the new scope and in accordance with the (by then) redesigned requirements.

EU Taxonomy amendments

The proposed “Content” Directive also provides for an “opt-in approach” whereby companies in the scope of the future CSRD with less than €450m in revenues would be exempted from EU Taxonomy reporting but could claim alignment or partial alignment for their activities.

Besides, a draft Delegated Act proposes significant changes to the current regulation, including introducing a materiality threshold for both non-financial and financial companies. Once formally adopted after a feedback period of 4 weeks, the Delegated Act will be submitted to the European Parliament and the Council for a scrutiny period (usually 2 months) before becoming applicable. The revised Delegated Act would apply from 1 January 2026 (for fiscal year 2025).

To fully understand the implications and prepare your organisation for these changes, download our full Omnibus guide below and stay informed about this evolving regulatory landscape.

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 your organisation navigate regulatory changes as they continue to develop.

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

By leveraging our extensive experience and tailored solutions, Forvis Mazars can support your organisation in achieving compliance, enhancing transparency, and driving sustainable growth amidst the volatile sustainability regulatory environment.

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