What is the ESG Omnibus?
The (ESG) Omnibus Simplification Package, presented by the European Commission on 26 February 2025, aims to create a consolidated sustainability framework, and simplify overlapping EU reporting and due diligence requirements. The main goals are:
- Reducing complexity and costs for businesses
- Aligning existing sustainability requirements
- Protecting small and medium size enterprises (SMEs) from disproportionate trickle-down effects
- While maintaining the European Union’s commitment to sustainability
It is important to consider that this package remains at a proposal stage. It is expected that it will undergo a fast-track legislative process and may be subject to additional changes.
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ESG Omnibus Package
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“This package brings simplification and proportionality to EU sustainability regulation. It is an opportunity for companies to focus on the topics that truly matter for their business, the environment, and society.”
Alexander SpekSustainability Lead PwC the NetherlandsNavigating the ESG Omnibus
The proposals provide organisations the opportunity to take a more diligent approach towards sustainability where strategy takes precedence over compliance. The extra time and the (anticipated) revised European Sustainability Reporting Standards (ESRS) provide proportionality and help organisations identify their sustainability goals and challenges before having to disclose these externally.
Even though the ESRS will be reviewed, it is essential for organisations to use this extra time wisely. We have identified a few considerations for distinct types of reporters:
Latest updates on the ESG Omnibus
The ESG Omnibus has two main components, which have the legal form of an EU directive. The first component addresses changes to the content of CSRD, CSDDD and the EU Taxonomy, while the second component includes changes to the scope and timing of these three legislations.
Latest updates CSRD
The proposed scope and timing requirements of CSRD are:
- Companies subject to reporting on 2024 (Wave 1) that have more than 1.000 employees remain in scope.
- Large companies and parents of large groups, which have a net turnover exceeding €50M or a total balance sheet total exceeding €25M (Wave 2) and have more than 1.000 employees, remain in scope, reporting on 2027 in 2028. This is an extension of two years compared to the previous timeline.
- For non-EU-headquartered companies, the revenue threshold is increased from €150 million to €450 million.
Additionally, there are some further changes in the content of the reporting obligations:
- Reporting undertakings should not seek additional sustainability information from SMEs in their value chain beyond what is specified in the voluntary standards for undertakings.
- Listed SMEs will not need to report on the Listed SME standards but may voluntarily report on VSME (Voluntary ESRS for SMEs) like any other SME.
- Sector-specific standards for sustainability reporting will no longer be issued.
- The first set of ESRS will be revised with reduced data points.
- By 2026, further assurance guidelines will be made available for limited assurance.
- The requirement to adopt standards for reasonable assurance has been removed to avoid increased assurance costs.
Latest updates CSDDD
The changes to CSDDD consider proportionality and shared responsibility, while preserving the substance of the directive. These include the following:
- A change in the phase-in for the first wave of companies in scope €1.5 billion turnover, >5,000 employees), which has been postponed from 26 July 2027 to 26 July 2028, aligning application of the CSDDD with the implementation date of the second wave. There is no expected delay for other companies in scope.
- The climate transition plan adoption remains, with slight nuances.
- The directive presents a novel approach to the in-depth assessments that prioritises direct business partners. Indirect supplier may still need to be engaged if plausible information of adverse impacts can be found.
- As with CSRD, requests for information for SMEs will also be limited to the data requested by the voluntary sustainability reporting standard.
- Each EU member state will define the financial penalties for non-compliance, removing the 5% minimum cap of worldwide turnover and deferring to further guidance by the EC in collaboration with Member States.
- Member states will not be able to introduce more ambitious measures with regards to due diligence obligations.
Latest updates EU Taxonomy
For the EU Taxonomy Regulation most of the changes concern the content and the scope of the reporting obligations:
- EU Taxonomy remains in scope for large companies with over 1,000 employees on average and a net revenue above €450 million.
- Taxonomy reporting will be voluntary for large undertakings with more than 1,000 employees but with a net turnover not exceeding €450 million.
- The proposal introduces simplified reporting templates reduce the burden on both non-financial and financial undertakings, cutting data points for non-financial undertakings and credit institutions by 66% and 89% respectively.
- Certain KPIs applicable to credit institutions are delayed until 2027.
For detailed information see the general publication from the EU with the latest extended updates and the Q&A additional official guidance from the European Commission. Or check PwC's Global Viewpoint document.
Join the webcast on ‘ESG Omnibus & CSRD lessons learned in the financial sector’
Thursday 17 April | 10.00 - 11.00 CET
During the webcast we will cover the following topics:
- The latest updates on the ESG Omnibus and the impact for financial institutions
- Lessons learned & insights regarding the implementation of the CSRD in the financial sector
- The assurance challenges we have encountered, and the solutions developed ensuring good compliance processes.
View back the webcast on ESG Omnibus & sustainability reporting.
The webcast we will cover the following topics:
- The ESG Omnibus proposal and its consequences
- Research insights on first CSRD reporters
- Update on sustainability reporting in the US
Next steps: the timeline of the ESG Omnibus
The ESG Omnibus Proposal was published on 26 February 2025.
The two components of the ESG Omnibus (Content and stop-the-clock proposals) will be approved separately:
The stop-the-clock proposal is currently undergoing fast-track procedure, being approved by the European Parliament on 3 April 2023. It is expected that it will be published in the Official Journal of the EU by Summer 2025. Member States will have until 31 December 2025 to incorporate the changes into national law.
The content proposal still needs to undergo ordinary legislative process. It needs to be approved by both co-legislators (European Parliament and Council of the EU). The European Council has encouraged these institutions to finalize the process before the end of the year, but changes are likely to happen. Once adopted, there is a twelve-month period for all EU member states to transpose the content of the directive into national law.
The proposed amendments to the Delegated Acts of the EU Taxonomy Regulation only need to be adopted by the European Commission. Once published, they will become directly applicable to all EU member states, without the need of transposition.
The European Commission has instructed EFRAG to draft its technical advice on the new ESRS by 31 October 2025. The Commission aims to adopt the revised ESRS at the latest six months after the directive is published in the Official Journal of the EU.
ESG Omnibus in broader context
Moving forward in the year, the EU Competitiveness Compass and European Commission Work Programme 2025, provide a roadmap on future developments of EU law. These include the following:
Interested in discussing the impact of the ESG Omnibus on your organisation?
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