CSRD after the Omnibus: new scope, value chain protection and the status of the ESRS

What this is about

Directive (EU) 2022/2464 (Corporate Sustainability Reporting Directive, CSRD) introduced sustainability reporting into the Accounting Directive 2013/34/EU. With Directive (EU) 2026/470 of 24 February 2026, known as Omnibus I, the Union legislature significantly reduced the number of companies required to report. The Directive was published in the Official Journal on 26 February 2026 and entered into force on 18 March 2026. Member States must transpose the amendments to the Accounting, Audit and CSRD Directives by 19 March 2027 (Article 5(1)).

The new scope

Under the amended Accounting Directive, only undertakings that exceed both limits on their balance sheet date are required to report:

• an average of more than 1,000 employees and
• a net turnover of more than EUR 450 million.

The same thresholds apply to parent undertakings on a consolidated basis, and to issuers whose securities are admitted to trading.

Third-country undertakings are covered where they generated a net turnover of more than EUR 450 million in the Union in each of the last two consecutive financial years. A subsidiary in the Union with a net turnover of more than EUR 200 million must then report. Where the third-country undertaking has no such subsidiary, a branch with a net turnover of more than EUR 200 million reports (Article 40a of the Accounting Directive).

The first wave and timeline

For the first group of undertakings, which already report for financial years from 2024, application is limited to financial years beginning between 1 January 2024 and 31 December 2026. According to the recitals, undertakings in this group that do not meet the new thresholds fall out of scope from financial year 2027.

Member States may also exempt them for financial years beginning between 1 January 2025 and 31 December 2026. According to the recitals, the reporting obligation for the second group applies to financial years beginning on or after 1 January 2027.

Protection of the value chain

Undertakings in the value chain with an average of no more than 1,000 employees are given special protection as "protected undertakings". The reporting standards may not require disclosures that would mean obtaining more information from them than the voluntary standards provide. Protected undertakings may refuse requests for information going beyond that. To determine their size, reporting undertakings may rely on a self-declaration, unless they knew or ought to have known that it was incorrect.

The Commission is to adopt the voluntary standards by delegated act by 19 July 2026. They are to be based on Commission Recommendation (EU) 2025/1710 of 30 July 2025 on a voluntary sustainability reporting standard for SMEs (Article 29ca of the Accounting Directive).

Further amendments

• No sector standards: The Commission's power to adopt sector-specific reporting standards has been deleted.
• Assurance: The statutory auditor expresses an opinion on sustainability reporting based on a limited assurance engagement (Article 34 of the Accounting Directive).

Status of the ESRS

The current European Sustainability Reporting Standards (ESRS) are set out in Delegated Regulation (EU) 2023/2772. On 3 July 2026, the Commission announced that it had adopted revised ESRS and a voluntary reporting standard for smaller companies. According to the announcement, the standards are part of the Omnibus I simplification package. They reduce the number of mandatory datapoints by over 60 % and the total number of datapoints by over 70 %. The Commission expects reporting costs per company to fall by more than 30 %.

According to the announcement, the two delegated acts are transmitted to the European Parliament and the Council for scrutiny. They apply once the scrutiny period of two months, which can be extended by a further two months, is over.

Transposition in Germany

The Federal Government's bill transposing the CSRD is before the Bundestag as printed paper 21/1857 of 29 September 2025. The CDU/CSU and SPD parliamentary groups have tabled an amendment in the Committee on Legal Affairs that is intended to incorporate the Omnibus changes (committee document 21(6)73 of 30 March 2026). The Committee on Legal Affairs held a public hearing on 13 April 2026.

What companies typically examine

1. Thresholds: Are 1,000 employees and EUR 450 million in turnover exceeded, at group level where relevant?
2. First wave: Does the company belong to the first group, and does its Member State use the exemption for 2025 and 2026?
3. Third country: Is the threshold of EUR 450 million in Union turnover reached?
4. Suppliers: What information may be requested from protected undertakings?

This post provides a general overview of the legal position and does not replace legal advice on individual cases.

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