EU Omnibus Regulation: finally approved

In brief

• The Omnibus I Directive (2026/470) has been published in the Official Journal of the European Union. The amendments to CSRD and CSDDD are therefore final. The directive will enter into force 20 days after publication.
• CSRD: only mandatory for companies with an average of more than 1,000 employees AND more than 450 million euros in net turnover.
• CSDDD: threshold raised to more than 5,000 employees AND more than 1.5 billion euros in net turnover. The obligation to draw up and implement a climate transition plan is dropped under the CSDDD.
• Value chain caps: after entry into force, companies with fewer than 1,000 employees do not have to provide information beyond the voluntary VSME standards.‍
• For SMEs: the legislation changes, but market demand does not. Large clients still need to report on their supply chain and will continue to request data.

What happened

On December 16, 2025, the European Parliament approved the Omnibus I package with 428 votes in favour, 218 against, and 17 abstentions. This confirms the provisional agreement reached on December 9 between the Parliament and the Council.

EU Directive 2026/470 amending the CSRD and CSDDD was published in the Official Journal of the European Union at the end of February. This means that the relaxations of the sustainability reporting and due diligence directives have become final. The directive enters into force 20 days after publication.

The agreement in detail

CSRD: significantly narrowed scope

The CSRD applies from financial years starting on or after 1 January 2027 to companies that meet both criteria:

• On average more than 1,000 employees
• More than 450 million euros net turnover

Wave 1 companies that already report for financial year 2024 but fall outside the new thresholds, may be exempted by their Member State from reporting for financial years 2025 and 2026.

Listed SMEs are completely removed from the scope.

CSDDD: even more far-reaching restrictions

The CSDDD only applies to companies that meet both criteria:

• More than 5,000 employees
• More than €1.5 billion net turnover

Important substantive changes:

• Climate transition plans: the obligation to draw up and implement a climate transition plan is dropped under the CSDDD. However, the CSRD obligation to report on any transition plan remains.
• Risk-based due diligence: companies can focus on the areas in their value chain where negative impacts are most likely.
• No EU-wide liability regime: civil liability remains a matter of national law.
• Maximum fines: limited to 3% of global net turnover.
• Timeline: transposition into national law by 26 July 2028, application from July 2029.

Value chain caps: protection for suppliers

Companies with fewer than 1,000 employees are not required to provide information beyond what is specified in the voluntary VSME standards.

Implications for businesses

What does this mean for companies that fall out of scope?

The legal obligation disappears, but market demand remains. Large clients still need to report on their value chain and will continue to request data from suppliers.

• EcoVadis remains a sought-after supplier assessment in many supply chains, especially in the private sector.
• The CO₂ Performance Ladder is used in public tenders in the Netherlands and can also be applied in Flemish public procurement.
• SBTi remains a widely used framework for substantiating climate targets.

The difference: you choose which framework suits your situation, instead of having to comply with a uniform reporting obligation.

What does this mean for companies that remain in scope?

Companies still falling under CSRD or CSDDD face an operational challenge:

• CSRD companies: double materiality analysis and reporting according to ESRS remain applicable (within the new scope).
• CSDDD companies: due diligence according to the adjusted, risk-based approach remains applicable (within the new scope).
• Their ability to demand detailed data from smaller suppliers is limited to what is provided for in the voluntary standards.

Timeline

CSRD

• Financial years from January 1, 2027: reporting according to revised CSRD and simplified ESRS (expected mid-2026).
• Wave 1 companies: report according to the original CSRD for financial year 2024. Member States can exempt them for 2025 and 2026 if they fall outside the new scope.

CSDDD

• Transposition into national law: July 26, 2028
• First application: July 2029

Background: how did we get here?

On February 26, 2025, the European Commission presented the Omnibus package to reduce the administrative burden surrounding sustainability reporting. The package was split into two parts: a 'stop-the-clock' directive for postponing deadlines (approved in April 2025), and the substantive simplifications that are now final.

The Commission originally proposed to raise the employee threshold from 250 to 1,000. Both the Council and Parliament went further than this proposal in their negotiating positions.

In June 2025, the Council added a financial threshold of €450 million in revenue and raised the CSDDD thresholds to 5,000 employees and €1.5 billion in revenue. In November 2025, Parliament proposed a threshold of 1,750 employees but ultimately accepted the Council's position of 1,000 employees in the final compromise.

What now?

The legislative process has been completed. Directive 2026/470 has been published in the Official Journal and enters into force 20 days after publication. Member States must transpose the directive into national law within twelve months.

For companies that remain in scope, the next milestone is the publication of the revised ESRS standards by the European Commission, expected mid-2026.

What we tell our clients

The Omnibus is a political compromise, not a sustainability strategy. And that's exactly how you should read it.

For many SMEs, this feels like a relief: no CSRD reporting, no audits, no endless questionnaires. Understandable. But anyone who now thinks sustainability will disappear from the agenda is missing the bigger picture.

The legislation changes. The market doesn't.

Large clients (retailers, OEMs, multinationals, ...) still need to report on their entire value chain. They will continue to request data. Not because they enjoy it, but because their own reporting obligations require it. The only difference: you can no longer be legally compelled to provide more than what voluntary standards prescribe.

That's a win. But it's not a license to do nothing.

The companies we advise, from mattress manufacturers to HVAC specialists, notice that the same questions keep coming. EcoVadis scores remain a selection criterion. EPDs remain a condition for market access. CO₂ data remains a requirement in tenders.

The difference is that you now choose which framework suits your situation. This isn't a loss of structure, but an opportunity to focus on what truly makes an impact, instead of just ticking boxes for compliance.

Our recommendation: use this period to get your data collection in order. Not because you have to, but because it will make you stronger. Companies with good data make better decisions, respond faster to customer inquiries, and are in a stronger position during negotiations.

The Omnibus is final. Time to focus on what matters.

Last update: March 3, 2026.

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