With many non-EU companies in scope for Corporate Sustainability Reporting Directive (CSRD) and/or the Corporate Sustainability Due Diligence Directive (CSDDD), these pieces of EU legislation continue to shape the future of sustainability reporting.
The February 2025 EU Omnibus Directive has proposed some important changes that impacts reporting timelines, data point expectations, and the scope and pace of implementation. Many companies have now fallen out of scope for direct reporting, but that doesn’t mean that your large business customers won’t ask you for relevant information in the next few years.
If your organisation is already preparing for CSRD or if you’re in the early stages of navigating its implications, here’s what the latest developments mean and what you might consider doing next.
What’s new: EU Omnibus Directive proposes some key adjustments
The EU Omnibus Directive introduces several updates that reflect growing concerns around report complexity, capacity constraints and costs across businesses. For some, it has been perceived as a weakening of what were groundbreaking and leading sustainability disclosures.
Some of the key changes include:
Deferral of certain ESRS data points for companies reporting in 2025 and 2026, for example, some value-chain disclosures, some biodiversity and workforce data points.
Major scope reduction, removing more than 80% of companies from scope, and upping the company size falling into scope to those with more than 1000 employees.
Reporting will be delayed by up to two years for CSRD, meaning that large companies and listed SMEs initially scheduled to start reporting in 2026 and 2027 will now start to disclose in 2028. CSDDD has been postponed until 2028.
Due diligence has been weakened for CSDDD, with risk assessments only required for direct suppliers, with the obligation to terminate contracts with non-compliant suppliers removed.
There is no deferral on assurance requirements which means that limited assurance is still mandatory from the first reporting year, and in-scope companies must still ensure that they have robust internal ESG controls and audit trails.
SMEs and Value-chain reporting: more time, but not less pressure?
The Omnibus has allowed for the deferred disclosure of some value chain data, but large companies must still demonstrate how they are approaching value chain diligence, even if data gaps still exist. So, you could still be involved if you receive CSRD-aligned data requests from your customers higher up the value chain. The pressure is still there, but the pathway might be more manageable if you take steps to understand and engage with the framework.
How we think businesses should respond now
Undoubtedly the Omnibus Directive offers some breathing space for many companies, but it doesn’t change the long-term direction of ESG reporting. Companies that remain in scope can take this time to decide on a realistic pathway, possibly at a slower pace, and we believe this still adds value to your business in the form of strengthened risk management and ESG integrity, as well as maintaining stakeholder confidence.
We’d recommend that you start with the following:
Double check if your business is still required to report and confirm the potential amended timelines.
Complete your double materiality assessment which is still a requirement – this takes time so start your preparation early. Discuss timings and the expected scope with your internal and external auditors to avoid costly adjustments later.
Conduct an ESRS gap analysis to understand which data points you have, what’s missing, and review your data control systems and processes.
Start value chain engagement early – smaller SMEs may need more time to gather and provide you with the right data.
Review the early wave of CSRD disclosures that we have started to see in Q1 2025 – those reports may help to understand the scope more.
Develop your CSRD roadmap to phase in full compliance.
Now is the time to embed a strategic and structured approach and to plan for the financial impact across project implementation.
Potential pitfalls and how to avoid them
Even with this updated flexibility, don’t assume that less effort is required! You still need to have audit-ready data processes and systems in place. The double materiality exercise will indicate which of the existing ESRS data is relevant to your organisation and that can be used to benchmark through a gap analysis. Some data points will change or be removed completely but we’d suggest not waiting for the specific standards to be finalised.
Engage with your finance team, risk team, and internal and external auditors now so that they also understand the requirements and what approach is being taken.
Final thoughts – CSRD remains a strategic imperative
The Omnibus Directive gives companies more time to get it right, but the direction of travel is clear: consistent ESG reporting is here to stay, and companies will be expected to provide better and deeper levels of reporting in future. In the UK we are likely to see the release of the Sustainability Reporting Standards (UK SRS) in the next couple of years which may bring more companies back into scope of in-depth ESG reporting.
Those who take this time to invest in the right systems, structures and skills will be well-positioned to adopt and respond to new requirements.
How Rawstone can support you
We are specialists in corporate sustainability reporting so please get in touch with us if you need assistance. We can work with you to understand the impact of ESG disclosures on your business and design a project approach.
Authored by Sarah Kirton.