On 26 February 2025, the European Commission published the first Omnibus Simplification Package (the “Omnibus Package”), which aims to reduce and simplify the administrative burdens associated with ESG reporting. “Omnibus” is a term used to describe the process of combining changes to multiple laws into a single package. Omnibuses are not an unknown phenomenon in Danish law; we just don’t call them omnibuses.
The Omnibus Package comes in the wake of the Commission's report on competitiveness in the EU - A Competitiveness Compass for the EU - which concluded that ESG regulation serves a good purpose, but that the current rules impose an excessive administrative and bureaucratic burden on the companies covered, which harms competitiveness in the EU.
Does this mean goodbye to the Reporting Directive (“CSRD”), the Due Diligence Directive (“CSRDDD”) and the Taxonomy Regulation? Below we have summarised the main highlights of the new Omnibus Package.
What does the Omnibus Package contain?
The Omnibus Package is divided into two proposals:
1. Postponement of deadlines
The Commission proposes to postpone the deadlines for sustainability reporting under the Reporting Directive by two years for companies that under the current rules would have to report for the first time for the financial year 2025 or 2026. The postponement of the deadlines is intended to allow time for the negotiations on the detailed legislative changes (see below) to be finalised.
This means that companies required by CSRD to report for the financial year 2025 or 2026 will not have to start reporting until the financial years 2027 and 2028, respectively. Listed companies that were required to report for 2024 will continue to report until the second part of the Omnibus Package is adopted, after which listed companies with less than 1,000 employees will also be exempt from the reporting requirements.
In addition, the Commission proposes to postpone the implementation deadline for the Due Diligence Directive to July 2027 and remove the first wave for entry into force, so that the entry into force date for the new first group of covered companies with more than 3,000 employees and an annual turnover of more than EUR 900 million is July 2028.
The Commission expects the deferral proposal to be adopted in a fast-track process in 2025.
The new proposal for deferring deadlines is illustrated as follows:
2. Detailed legislative changes
The second part of the Omnibus Package includes comprehensive changes to the Reporting Directive, the Due Diligence Directive and the Taxonomy Regulation and is expected to be adopted in autumn 2026.
What are the key changes to the CSRD?
New size thresholds
It is proposed that the Reporting Directive in the future will only apply to companies with
- more than 1,000 employees and
- either a turnover of more than EUR 50 million (DKK 391 million) or
- a balance sheet total of more than EUR 25 million (DKK 196 million).
These new size thresholds reduce the number of companies covered by the CSRD by approximately 80 % and bring the scope of the Reporting Directive closer to the Due Diligence Directive. The size thresholds apply to both listed and unlisted companies, so listed companies with 1,000 or fewer employees will now be exempt from reporting.
Simplification of the ESRS
The reporting standards (ESRS) need to be reduced due to overlap between several disclosure requirements and data points. The proposal includes reducing the number of data points and data requirements, clarifying unclear provisions in the reporting standards and improving consistency with other legislation. In addition, the proposal proposes to remove all sector-specific standards.
Voluntary reporting standard and value chain restrictions
The Commission will introduce a voluntary reporting standard - based on the standard for SMEs - for companies that will no longer be subject to the Reporting Directive (the “VSME standard”). The standard will serve as a tool for companies to provide sustainability information to companies that may request information. The change means that companies covered by the Reporting Directive may not request companies in their value chain with 1,000 or fewer employees for sustainability information that exceeds the requirements of the VSME standard.
What are the key changes to the CSDDD?
Tightening the chain of activity
Companies' due diligence requirements in the activity chain will be limited from indirect business partners to direct business partners. Under the current rules, companies must proactively address negative impacts throughout the activity chain. The new proposal means that companies only need to perform due diligence on indirect business partners when there is plausible information indicating a negative impact at the level of an indirect business partner.
Reducing the trickle-down effect
The Commission wishes to reduce the trickle-down effect on companies with less than 500 employees (i.e. SMEs and small mid-cap companies) by limiting the amount of information that can be required for the due diligence of large companies. Large companies can only ask SMEs and small mid-cap companies for information specified in the VSME standard. This aims to reduce the administrative burden for small companies.
Limitation of the term “stakeholder”
The current rules of the Due Diligence Directive require meaningful engagement with stakeholders when collecting information on adverse impacts and developing preventive action plans. The new proposal simplifies the definition of “stakeholders” and limits the term to workers and their representatives, as well as individuals and local communities whose rights and interests are directly affected by the company’s products, services and activities and the business partner’s products, services and activities.
New fine level
The requirement for a fine of at least 5 % of the company's global net turnover will be removed and new common guidelines on the fine level will be developed by the Commission in cooperation with Member States.
Less monitoring
The requirement for annual monitoring of the company's own due diligence measures to assess their adequacy and effectiveness will be changed from 1 to 5 years. However, companies are required to continuously assess the implementation of due diligence measures and update them if there are reasonable grounds to believe that the measures are no longer adequate and effective.
New rules on civil liability
It is proposed to remove the EU harmonised rules on civil liability and leave the issue to national law instead. In addition, it is proposed that trade unions, NGOs and other non-governmental organisations will no longer be allowed to bring actions for violation of the CSDDD on behalf of victims or to support such actions brought directly by the injured parties.
Adjustment of climate plan requirements
The requirement to “implement” a climate change mitigation plan is removed. Instead, it is clarified that companies' obligation to adopt a climate plan includes a description of planned and implemented measures that support the plan.
What are the key changes to the Taxonomy Regulation?
New size thresholds
The Commission proposes to introduce mandatory reporting for companies that will in future be covered by the CSRD with an annual turnover exceeding EUR 450 million and the possibility of voluntary reporting for companies covered by the CSRD with an annual turnover of EUR 450 million or less.
Reduction and simplification of reporting requirements
The mandatory reporting forms are simplified by reducing the number of data points by approximately 70 %.
Companies with a turnover of EUR 450 million or less that consider their economic activities to be aligned or partially aligned must report on the share of turnover and CapEX. Reporting on the share of OpEx remains voluntary and there is no reporting requirement if the company's activities are assessed as solely eligible or non-eligible.
What can we offer?
The Omnibus Package contains proposals for multiple laws, so the above is not exhaustive. The proposal must be negotiated in the European Parliament and the Council of Europe before it can be adopted. The proposal must then go through the Danish legislative process.
The Commission's proposal to postpone deadlines is expected to be adopted in 2025, while the other legislative changes are not expected to be adopted until 2026.
Contact us for assistance in understanding the new proposal and its impact on your business. We offer help with interpreting the directive as well as advising on implementation and compliance with regulatory ESG requirements.