What is the EU Omnibus?

From proposal to law

The Omnibus directive was officially adopted by the Council of the European Union on 24 February 2026 and published in the Official Journal of the European Union on 26 February 2026. It enters into force 20 days after publication, with Member States required to transpose the changes into national law within 12 months.

This marks the end of a year-long process led by President Ursula von der Leyen to simplify and reduce the cost of sustainability reporting, especially for mid-sized companies.

What the Omnibus covers

The Omnibus changes four key areas of EU sustainability law: the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD also referred to as CS3D), the EU Taxonomy (which classifies environmentally sustainable activities), and the Carbon Border Adjustment Mechanism (CBAM, which puts a price on carbon-heavy imports into the EU).

The biggest changes affect CSRD and CSDDD, which set the rules for sustainability reporting and supply chain due diligence for large companies in the EU.

Changes to CSRD

The biggest change is a much narrower scope. Now, only EU companies with more than 1,000 employees and over €450 million in turnover need to report under ESRS and the EU Taxonomy. Before, the CSRD applied to companies with 250 employees and €40 million in revenue, so about 80% of companies are no longer required to report.

The number of required ESRS data points drops from 1,073 to 320, a 70% reduction. The directive also provides clearer guidance on double materiality and allows companies to skip some reporting if it would be too costly or difficult. Sector-specific standards planned for 2026 were removed.

Member States can now exempt 'wave 1' companies from reporting for the 2025 and 2026 financial years. This gives companies already in scope more time as national rules are updated.

Only limited assurance is now required, and there are no plans to move to reasonable assurance.

For value chain reporting, companies in scope do not have to collect data from suppliers not covered by the CSRD. Suppliers with fewer than 1,000 employees are now 'protected undertakings' and can decline extra information requests, unless they choose to follow the voluntary SME standard.

Changes to CSDDD

The changes to CSDDD are also important. Companies must now use a risk-based approach for their whole supply chain, not just their direct suppliers. This keeps the scope broader than originally proposed.

The implementation deadline is now July 2028, a year later than before. Civil liability at the EU level has been removed, so enforcement is now the responsibility of each Member State. Fines are capped at 3% of global turnover, down from the original 5%.

Changes to EU Taxonomy and CBAM

Taxonomy reporting now only applies to companies that meet the CSRD threshold of at least 1,000 employees and €450 million in turnover. Smaller companies can choose to report voluntarily using simpler standards. Other changes include easier templates, optional OpEx reporting, and a 10% materiality threshold.

For CBAM, importers who handle less than 50 tonnes of CBAM goods each year are now exempt. Larger importers have simpler rules for calculating and reporting emissions.

What this means in practice

The Omnibus means fewer companies need to report under CSRD, but those that do will face higher expectations for data quality and accuracy.

Companies that are no longer required to report must decide whether to continue collecting sustainability data themselves. Customers, investors, and banks still expect data that goes beyond what the law requires. Supply chain requests, investor checks, and sustainable finance all drive high demand for structured data. Voluntary reporting for smaller companies, based on the VSME standard, shows that data infrastructure remains important. The focus shifts from mandatory compliance to operational readiness.

A note on timing

The directive is now in effect, but each country is still updating its own laws.

Companies should keep an eye on national developments, as the timing of exemptions such as 'wave 1' relief will vary. The agreement also allows the European Commission to review the scope of the CSRD and CSDDD in the future, so there may still be some uncertainty.