EU Sustainability “OMNIBUS” reform

Directive (EU) 2026/470 amending the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD/CS3D) was published on 26th February 2026, in the Official Journal of the European Union.

The Omnibus I Directive will enter into force on 18th March 2026. Member States must transpose its provisions into national law by 19th March 2027, except for the amendments concerning the CSDDD, which must be transposed by 26th July 2028.

Our colleague Anna Rinaldi took a closer look at the changes to the CSRD and would like to share her thoughts with us.

	Theme	Before	Now
General Changes	Scope — Significantly Narrowed	Large undertakings and listed SMEs (except micro-entities) were required to report.	Only companies exceeding both: €450 million net turnover and 1,000 employees (average) are subject to mandatory sustainability reporting. Listed SMEs are fully excluded.
	Value Chain Data Requests — Protections for Smaller Suppliers	Reporting companies could broadly request ESG data from suppliers.	Undertakings in the value chain with an average of no more than 1,000 employees may refuse information requests exceeding the applicable voluntary sustainability reporting standards. Reporting companies must inform them of this right.
	Voluntary Reporting Standards — Formalised	No official EU voluntary standard (only EFRAG’s VSME recommendation).	By 19th July 2026, the Commission must adopt official voluntary sustainability standards based on EFRAG’s VSME, for companies outside CSRD scope, reviewed every 4 years.
	Consolidation and Group Reporting — Flexibility	All parent undertakings had to report consolidated sustainability data, regardless of group structure.	Financial holding companies whose subsidiaries operate independently may opt out of consolidated sustainability reporting. Parent companies may exclude newly acquired, merged, or divested entities from reporting in their first year.
Sustainability Assurance	Approval of Assurance Firms — Simplified	Full audit-firm governance requirements.	Only one designated “key sustainability partner” must be an approved statutory auditor.
	Limited Assurance Standards — Deadline Extended	The Commission was required to adopt limited assurance standards by 1st October 2026.	The deadline has been extended to 1st July 2027.
	Reasonable Assurance — Abandoned	The Commission was required to consider adopting reasonable assurance standards by October 2028.	This requirement has been completely removed, with no pathway toward reasonable assurance at EU level.

The Commission is adopting a delegated act to substantially reform the ESRS, removing less critical datapoints, prioritising quantitative over narrative disclosures, clarifying materiality, and enhancing interoperability with global standards (ISSB, GRI, etc.).

At the same time, the Commission is going to establish a dedicated online portal to provide companies with guidance, templates, and support for both mandatory and voluntary sustainability reporting, linked to national portals.

With these reforms, the EU aims to streamline sustainability reporting, reduce the administrative burden on companies, strengthen protections for smaller suppliers and align EU standards more closely with global frameworks, marking a significant step toward more effective and coherent corporate sustainability governance.

Value Chain Data Requests — Protections for Smaller Suppliers

Before	Now
Reporting companies could broadly request ESG data from suppliers.	Undertakings in the value chain with an average of no more than 1,000 employees may refuse information requests exceeding the applicable voluntary sustainability reporting standards. Reporting companies must inform them of this right.

Voluntary Reporting Standards — Formalised

Before	Now
No official EU voluntary standard (only EFRAG’s VSME recommendation).	By 19th July 2026, the Commission must adopt official voluntary sustainability standards (Art. 29ca) based on EFRAG’s VSME, for companies outside CSRD scope, reviewed every 4 years.

Consolidation and Group Reporting — Flexibility

Before	Now
All parent undertakings had to report consolidated sustainability data, regardless of group structure.	Financial holding companies whose subsidiaries operate independently may opt out of consolidated sustainability reporting. Parent companies can exclude newly acquired or merged entities from reporting in the first year after acquisition. Entities that leave the group mid-year may be excluded from reporting for that year.

Approval of Assurance Firms — Simplified

Before	Now
Full audit-firm governance requirements.	Only one designated “key sustainability partner” must be an approved statutory auditor.

Limited Assurance Standards — Deadline Extended

Before	Now
The Commission was required to adopt limited assurance standards by 1st October 2026.	The deadline has been extended to 1st July 2027.

Reasonable Assurance — Abandoned

Before	Now
The Commission was required to consider adopting reasonable (higher-level) assurance standards by October 2028.	This requirement has been completely removed, with no pathway toward reasonable assurance at EU level.