With the implementation of CSRD, CSDDD and a range of other measures targeted at conducting business in a sustainable and transparent way on the European market, many companies are struggling to keep up.
The result? High advising costs and uncertainty about compliance. Especially for small and medium-sized sustainable brands, the new set of legislation is intimidating and demanding already scarce funds and time to remain compliant. It leads to missing out on growth opportunities that could have scaled their impact and less impact actually being made.
Luckily, the EU is taking this feedback seriously and has launched the Omnibus proposals. The idea behind Omnibus is to simplify the reporting standards of existing directives like the CSRD and to provide more time for companies to become compliant.
In this blog, we’re zooming in on the EU’s Omnibus initiative and provide a clear overview of what it entails.
What is the European Commission’s Omnibus package?
The European Commission Omnibus is a set of proposals to simplify EU sustainability reporting rules. The idea is to make it super clear for companies what they need to do to adhere to the sustainability regulations. Omnibus proposes amendments to the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), the Carbon Adjustment Mechanism (CBAM), and the InvestEu Regulation.
Why did the European Commission come up with the Omnibus proposals?
With a multitude of new legislation targeted at sustainability and transparency, companies are overwhelmed with adapting to new reporting standards and gathering data to comply. Omnibus is targeted at providing a relief of over €6.3 billion in administration costs by simplifying the process of becoming compliant with each regulation.
What do the EU’s Omnibus proposals entail?
Omnibus aims to streamline the reporting updates between the sustainability and transparency directives.
For CSRD:
- The scope is significantly reduced. Only companies with more than 1000 employees or a yearly turnover of at least 50 million euros will be required to comply with the reporting directive.
- For those still in scope (only ~20% of the original), the reporting deadline is postponed until 2028.
- The reporting standards will be simplified, with a significant reduction of data points included.
For CSDDD:
- The scope is significantly reduced. Only companies with more than 1000 employees or a yearly turnover of at least 50 million euros will be required to comply with the reporting directive.
- For those still in scope (only ~20% of the original), the reporting deadline is postponed until 2028.
- Due diligence is only required on direct business partners rather than throughout the full supply chain.
- Assessment interval from once every year to once every five years.
- Financial services are excluded.
- Limiting the information that companies may request from their SME business partners to avoid the trickle-down effects.
- Deleting the harmonised EU conditions for civil liability.
- Postponing the implementation by one year.
How does the EU Omnibus proposals affect your business as a small or medium brand?
If you were within scope, most likely you’ll now be out of scope for the reporting directives. If you are working with business partners that are still in scope of CSRD, they can’t require you to provide more information than written in the voluntary reporting standard (VSME).
Also, with the implementation deadlines being pushed, you will have more time to prepare.
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