What to expect from the EU Omnibus Sustainability Package

Ambitions of the EU Omnibus Sustainability Package

The key objectives are to:

Reduce administration and compliance burdens, especially for smaller and mid-sized companies. The package was produced in response to complaints, particularly from German and French businesses, that EU red tape was hindering their competitiveness against rivals outside the bloc.

Introduce proportionality in existing EU frameworks like the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). It aims to ensure thresholds and requirements are proportional to the size of the businesses affected, focusing on those with the largest impact.

Streamline and improve clarity by harmonising reporting deadlines, data requirements and review cycles across the existing regulations.

Maintain the ambition of tackling climate change effectively and indeed, to improve the effectiveness of regulation by making it easier to implement and comply.

What will change under the EU Omnibus Sustainability Package?

The initial package of proposals was published in February 2025. Immediate delays to some regulations were implemented in April, with member states directed to pass local laws to implement the directive by the end of the year. Other measures are still under discussion and those negotiations will continue for the remainder of the year.

Broadly, there are three main areas that will change.

1. CSRD Scope
   Reporting for the Corporate Sustainability Reporting Directive (CSRD) will only be required from companies with more than 1000 employees (and €450mn turnover or €25mn in assets).
   This would reduce the number of companies affected from nearly 45,000 under the initial directive to just 10,000.
   Implementation deadlines for the second and third wave of firms affected are postponed till 2028.
2. Supply Chain Due Diligence (CSDDD)
   Compliance is now postponed by one year (from 2027 to 2028) and reporting now only extends to direct suppliers, rather than the entire supply chain, unless particular risks are identified. And the frequency of reporting is now required every five years, instead of annually.
3. EU Taxonomy and Carbon Tariffs (CBAM)
   EU Taxonomy reporting is now voluntary for smaller companies. Similarly, companies importing under 50 tonnes a year are exempted from the Carbon Border Adjustment Mechanism (CBAM). This exempts 182,000 of the 200,000 companies originally covered by CBAM, on the grounds that the remaining companies account for 99% of emissions in the scheme.

While the package has been welcomed by the broader business community, it has also received criticism. Many environmentalists have viewed the measures as a watering-down of the impact of the initial regulations.

Meanwhile, some economists and business analysts have suggested that universal standards and requirements around sustainability offer EU companies competitive advantages. Others believe the resulting lack of transparency and fragmentation in regulation from the Package will harm investment and impair the optimum allocation of capital, and that the size of companies is not a factor in tackling the risks created by climate change.

The final package is still under discussion, as noted, and it is not known whether these criticisms will affect the outcome.

What should companies do to prepare for the EU Omnibus Sustainability Package?

For smaller companies, the changes may feel like a welcome relief, but stepping back from sustainability altogether would be shortsighted. Investors, customers, and supply-chain partners are still demanding transparency, and voluntary reporting can build trust, improve efficiency, and reduce long-term risk.

For larger companies, streamlined reporting and harmonisation will be valuable. But the steps they will have already taken in the face of previous regulation will also remain important. They should:

• Continue compliance with current CSRD and CSDDD requirements until the new rules are confirmed. These aren’t going away, so your existing work on this will remain needed.
• Stay informed on the process. The final changes still need to be decided. And local implementation may vary across different member states.
• Invest strategically in ESG reporting infrastructure. Audit-grade energy and carbon data systems, like EnOS™ Ark, help prepare organisations for shifting requirements with minimal extra effort.
• Maintain readiness for further change. The rapid increase in climate risks over recent years have led to considerable regulatory change. Digital platforms that can adapt quickly, like EnOS™ for seamless data integration across devices, reduce the risks of sudden new obligations.
• Be proactive, rather than reactive. The energy transition is more than regulation, it’s a business opportunity. Early movers will gain reputational, operational, and competitive advantages.

Where next?

The EU Omnibus Sustainability Package is designed to simplify compliance, but it doesn’t change the fundamental direction of travel: businesses will need to prove transparency, resilience, and emissions reduction in the years ahead.

That’s why companies should see this package less as a relaxation and more as a window to prepare. Building robust, AI-powered systems now. From EnOS™ for complete data integration, to EnOS™ Ark for portfolio wide energy management and optimisation, ensures compliance today and future-proofs business models for tomorrow.

The regulatory landscape may shift, but climate risk is constant. Companies that embrace digitalisation for decarbonisation will not only stay compliant, they will also unlock cost savings, investor confidence, and a stronger competitive position in the energy transition.