The EU’s Omnibus Package: What’s Changing in CSRD and CSDDD

In 2021 and 2022, the European Union introduced two groundbreaking sustainability laws: the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD).

Now, more than three years later and with implementation just around the corner, the European Commission has put forward an ‘Omnibus Simplification Package’. This new proposal aims to ease the regulatory and reporting burdens of both directives.

Here’s a breakdown of what the EU is proposing for each.

Corporate Sustainability Due Diligence Directive (CSDDD)

What is it?
The CSDDD is an EU regulatory framework requiring large companies to identify, mitigate, and report on human rights and environmental risks across their operations and supply chains.

Omnibus Package Updates (February 2025)

The European Commission has proposed several key changes:

Delayed implementation:
The law’s introduction is postponed to July 2027, with compliance for the largest companies beginning July 2028.
(previously July 2026 and 2027).

Narrowed scope of due diligence:
Companies will only be required to assess their Tier 1 suppliers, unless there is clear evidence of risks further down the chain.
(previously required full value chain assessment)

Examples of risk indicators:
Media reports of harmful activities or formal complaints received by a company.

Reduced reporting frequency:
Due diligence reports will be required every five years instead of annually.

Amended partner obligations:
Companies will no longer be required to terminate non-compliant business partners. Suspension is recommended, with termination as a last resort.

SME protections:
New safeguards will help limit excessive data requests to SMEs.

Corporate Sustainability Reporting Directive (CSRD)

What is it?
The CSRD is an EU regulation requiring companies to disclose their environmental, social, and governance (ESG) impacts.

Omnibus Package Updates (2025)

The European Commission has proposed several key changes:

80% reduction in eligible companies:
The scope of companies required to comply with CSRD would shrink from 50,000 to 10,000.

The new threshold for EU companies:
Companies must have:

• 1,000+ employees, and
• Either:
  • €50 million turnover, or
  • €25 million total on the balance sheet

(Previously, companies met the criteria if they had 250+ employees, €50m+ turnover, or €25m+ on the balance sheet – meeting two of the three.)

Voluntary requirements:
Companies no longer meeting the threshold would follow a voluntary reporting framework.

Reporting delays:
Reporting obligations would be postponed by two years, now starting in:

• 2026 or 2027, depending on company size
  (originally 2025 or 2026)

Removal of sector-specific standards:
Industry-specific reporting requirements would be eliminated.

Closing thoughts

Both proposals are currently under review by the European Parliament and the Council. However, the decision to postpone and dilute key aspects of the legislation has drawn significant criticism.

Many argue that the changes undermine the original intent of the directives. Reducing the number of companies covered by the CSRD to just 10,000, and limiting due diligence under the CSDDD to Tier 1 suppliers, significantly weakens the scope and impact of the regulations.

This comes at a time when strong action is more urgent than ever. With 2024 recorded as the hottest year globally and an estimated 50 million people living in modern slavery as of 2021, the need for robust, enforceable corporate sustainability legislation is undeniable.

For more information or to explore how Action Sustainability can support your organisation, please contact our team.