The European Commission Has Published the Omnibus Proposal. What Does That Mean for CSRD and CSDDD Compliance?
The European Commission Has Published the Omnibus Proposal. What Does That Mean for CSRD and CSDDD Compliance?
March 2025
Irene Kyriakides, Partner, Victoria Mertikopoulou, Partner, Vassiliki Vlontzou, Associate
Kyriakides Georgopoulos Law Firm
EU Corporate Sustainability Rules: A Shifting Landscape Amid Global Pressure
The regulatory landscape in the EU is evolving rapidly, with the Directive (EU) 2022/2464 on corporate Sustainability reporting (“CSRD”) and Directive (EU) 2024/1760 on corporate sustainability due diligence (“CSDDD”) at the center of intense debate. These landmark initiatives, aimed at enhancing corporate transparency and accountability, have sparked both excitement and opposition — facing scrutiny from businesses, legal experts, and policymakers alike. After extensive discussions and political negotiations, the European Commission has published the Omnibus Proposal (the “Proposal”) with a view to reshaping the form of these Directives by easing excessive regulatory burden, reflecting a broader push to strike a balance between sustainability goals and economic competitiveness. This development is part of a larger effort on the part of the EU, which is under growing pressure to ensure that its regulatory framework does not undermine its competitiveness and that it remains attractive for business, particularly in response to Mario Draghi’s Report of EU competitiveness and in light of the more flexible approach emerging across the Atlantic. In this Newsflash, we break down the main elements of this latest development, key concerns, and what the suggested changes mean for companies navigating this evolving legal terrain. Stay ahead of the curve because in today’s regulatory climate, change is the only constant.
Main elements:
Key proposed changes to the CSRD
- The employee threshold for mandatory CSRD compliance is proposed to increase to 1000 from 250 (the balance sheet and turnover thresholds shall remain unchanged at 25 million and 50 million, respectively). This proposed change is estimated to remove more than 80% of companies from the CSRD’s scope.
- Reporting requirements are proposed to be deferred by two (2) years for:
- Companies subject to reporting in 2026 (for financial year 2025); and
- Companies subject to reporting in 2027 (for financial year 2026).
Key proposed changes to the CSDDD
- The entry into application of the Directive is proposed to be delayed until July 2028 with a view to providing companies with adequate time to prepare for compliance.
- Value chain due diligence is proposed to be narrowed down to direct (tier 1) suppliers and business partners instead of being extended to the entire value chain.
- Civil liability for failing to comply with due diligence obligations is proposed to be removed.
- The frequency of periodic assessments (monitoring) of the due diligence mechanisms in place is proposed to be extended from one year to every five years.
Key concerns
This development is expected to create uncertainty, especially for companies that have already invested substantial resources in complying with the above Directives.
Furthermore, while the European Commission in its press release encourages co-legislators to treat the Proposal as a priority, the timeline for the adoption of the Proposal’s final text remains uncertain, as does the extent to which it may diverge from the original draft. And this, in an already complex regulatory landscape.
What do the suggested changes mean for companies
Companies subject to CSRD reporting in 2025 (for financial year 2024) [Wave 1 companies] should still adhere to their CSRD obligations since the Directive and the national laws transposing it remain in force for now and the respective reporting requirements/thresholds are still applicable.
As regards companies that are not yet subject to the CSRD or the CSDDD, and for which compliance is scheduled at a later date based on the current version of the Directives, these are encouraged to continue their efforts to align with the ESG objectives provided therein. This is because while regulatory changes may impact certain technical aspects of the Directives, the core qualitative requirements remain unchanged, ensuring continuity in compliance expectations.
Next Steps
The legislative proposal will now be submitted to the European Parliament and the Council for their consideration and adoption. On our end we will be monitoring developments closely with regard to the Proposal and will regularly publish updates.
March 2025
Irene Kyriakides, Partner, Victoria Mertikopoulou, Partner, Vassiliki Vlontzou, Associate
Kyriakides Georgopoulos Law Firm
EU Corporate Sustainability Rules: A Shifting Landscape Amid Global Pressure
The regulatory landscape in the EU is evolving rapidly, with the Directive (EU) 2022/2464 on corporate Sustainability reporting (“CSRD”) and Directive (EU) 2024/1760 on corporate sustainability due diligence (“CSDDD”) at the center of intense debate. These landmark initiatives, aimed at enhancing corporate transparency and accountability, have sparked both excitement and opposition — facing scrutiny from businesses, legal experts, and policymakers alike. After extensive discussions and political negotiations, the European Commission has published the Omnibus Proposal (the “Proposal”) with a view to reshaping the form of these Directives by easing excessive regulatory burden, reflecting a broader push to strike a balance between sustainability goals and economic competitiveness. This development is part of a larger effort on the part of the EU, which is under growing pressure to ensure that its regulatory framework does not undermine its competitiveness and that it remains attractive for business, particularly in response to Mario Draghi’s Report of EU competitiveness and in light of the more flexible approach emerging across the Atlantic. In this Newsflash, we break down the main elements of this latest development, key concerns, and what the suggested changes mean for companies navigating this evolving legal terrain. Stay ahead of the curve because in today’s regulatory climate, change is the only constant.
Main elements:
Key proposed changes to the CSRD
- The employee threshold for mandatory CSRD compliance is proposed to increase to 1000 from 250 (the balance sheet and turnover thresholds shall remain unchanged at 25 million and 50 million, respectively). This proposed change is estimated to remove more than 80% of companies from the CSRD’s scope.
- Reporting requirements are proposed to be deferred by two (2) years for:
- Companies subject to reporting in 2026 (for financial year 2025); and
- Companies subject to reporting in 2027 (for financial year 2026).
Key proposed changes to the CSDDD
- The entry into application of the Directive is proposed to be delayed until July 2028 with a view to providing companies with adequate time to prepare for compliance.
- Value chain due diligence is proposed to be narrowed down to direct (tier 1) suppliers and business partners instead of being extended to the entire value chain.
- Civil liability for failing to comply with due diligence obligations is proposed to be removed.
- The frequency of periodic assessments (monitoring) of the due diligence mechanisms in place is proposed to be extended from one year to every five years.
Key concerns
This development is expected to create uncertainty, especially for companies that have already invested substantial resources in complying with the above Directives.
Furthermore, while the European Commission in its press release encourages co-legislators to treat the Proposal as a priority, the timeline for the adoption of the Proposal’s final text remains uncertain, as does the extent to which it may diverge from the original draft. And this, in an already complex regulatory landscape.
What do the suggested changes mean for companies
Companies subject to CSRD reporting in 2025 (for financial year 2024) [Wave 1 companies] should still adhere to their CSRD obligations since the Directive and the national laws transposing it remain in force for now and the respective reporting requirements/thresholds are still applicable.
As regards companies that are not yet subject to the CSRD or the CSDDD, and for which compliance is scheduled at a later date based on the current version of the Directives, these are encouraged to continue their efforts to align with the ESG objectives provided therein. This is because while regulatory changes may impact certain technical aspects of the Directives, the core qualitative requirements remain unchanged, ensuring continuity in compliance expectations.
Next Steps
The legislative proposal will now be submitted to the European Parliament and the Council for their consideration and adoption. On our end we will be monitoring developments closely with regard to the Proposal and will regularly publish updates.
