The ESG Omnibus

Discover the key proposed regulatory changes and the impacts for your organisation

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

“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 Netherlands

Navigating 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:

Closely monitor revisions to the ESRS.
Refresh your Double Materiality Analysis (DMA) in line with potential new guidance to focus on genuinely relevant sustainability matters.
Continue integrating sustainability practices, align your corporate governance and reporting into your organization.

Reassess your revised reporting approach based on proposed changes to legislation.
Conduct DMA promptly to identify key strategic topics for reporting as it remains the cornerstone of CSRD.
Utilise the two additional years to establish baselines and develop strategies for key sustainability themes before setting targets and disclosing.
Proceed with essential actions, such as climate and human rights risk assessments, required under other regulations.
Organize for CSRD reporting by clearly defining roles and responsibilities across Finance, Sustainability, and Strategy departments and business functions. Align your corporate governance and use this time to set up and test your reporting processes.

Leverage any preparation you have already done to inform your sustainability strategy
If you have not started, use the (upcoming) voluntary standards to set your strategic and reporting direction

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

View back the webcast

Next steps: the timeline of the ESG Omnibus

The ESG Omnibus Proposal was published on 26 February 2025.

Step 1
The Omnibus legislative process is expected to take around 3-4 months (fast-track) if the Commission’s proposal finds sufficient support in the Council of the EU and European Parliament.

Step 2
The Omnibus package would then need to be approved by both co-legislators. And published in the Official Journal of the EU.

Step 3
Once published, the text gives a twelve-month period for all EU member states to incorporate into their national law (transposition).

Step 4
The EU Commission aims to adopt the revised ESRS at the latest six months after the proposal is published in the Official Journal of the EU.

Step 5

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: