In December 2025, the trilogue between the European Parliament, the Council of the EU, and the European Commission concluded, reaching an agreement on Omnibus I: the simplification package that introduces targeted amendments to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).

The CSRD aims to regulate sustainability performance reporting in a more detailed and standardised way, including environmental, social, and governance (ESG) aspects. The CSDDD, on the other hand, seeks to strengthen oversight of corporate value chains in order to prevent, mitigate, and reduce impacts on human rights and the environment in companies’ activities and in the value chains in which they operate.

The two directives entered into force on 5 January 2023 (CSRD) and 25 July 2024 (CSDDD), respectively. From the date of entry into force, Member States have two years to transpose and implement the legislation. In Italy, the CSRD was transposed in September 2024, while the transposition of the CSDDD was scheduled for July 2026.

However, from February 2025 onwards, following the presentation of the “Competitiveness Compass”, a plan to relaunch the European economy, the European Commission initiated a process to simplify legislation, aiming to reduce European reporting burdens by 25% and ease the “regulatory burden” on companies, thereby promoting competitiveness.

This simplification is carried out through “Omnibus” packages: legislative initiatives that, through a single act, coordinate, amend, simplify, and make operational previous rules governing complex matters. 

The packages published to date cover various sectors:

• Omnibus I – dedicated to sustainability
• Omnibus II – dedicated to investments
• Omnibus III – dedicated to agriculture
• Omnibus IV – dedicated to the single market
• Omnibus V – dedicated to defence
• Omnibus VI – dedicated to chemicals
• Omnibus VII – dedicated to digitalisation
• Omnibus VIII – dedicated to environmental regulation

In this article, we focus on Omnibus I, dedicated to sustainability, which intervenes on the CSRD, the CSDDD, and the European Taxonomy.

As anticipated, the Omnibus I package was presented by the European Commission in February 2025. Following the presentation of the proposal, the legislative process began, which requires approval of the text by the European Parliament and the Council of the European Union. The Council of the EU expressed a favourable opinion on the simplifications in June 2025, proposing amendments to the text, while the Parliament approved its position in November 2025 with further changes. The three institutions sought an agreement, which was reached in December 2025. By the first quarter of 2026, the Council should formally approve the text voted by Parliament, closing the legislative process and allowing for publication in the EU Official Journal. Below, we outline the main changes.

On 16 December, the European Parliament, meeting in plenary, definitively approved the Omnibus I package. The approval closes negotiations on two fundamental pillars of sustainable finance: the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). By the first quarter of 2026, the Council should formally approve the text voted by Parliament, closing the legislative process and allowing for publication in the EU Official Journal.

Amendments to the Corporate Sustainability Reporting Directive (CSRD)

• The CSRD will apply only to companies with more than 1,000 employees and an annual net turnover exceeding €450 million. The rules will also apply to non-EU companies with a net turnover in the Union exceeding €450 million and to their subsidiaries and branches generating turnover in the EU exceeding €200 million. The original CSRD text required sustainability reporting from companies meeting two of the following three criteria: at least 250 employees, €40 million in net turnover, and €20 million in balance sheet assets. This amendment excludes around 90% of the companies initially covered (RenewableMatter), drastically reducing the scope of application.

• Companies with fewer than 1,000 employees will not be required to provide their larger business partners with information beyond that required by voluntary reporting standards. This change limits the cascade effect on the value chain of large companies subject to mandatory reporting, narrowing the reach of the legislation.

• Reporting obligations will be significantly simplified, and sector-specific reporting will become voluntary. As part of the regulatory easing process, the European Sustainability Reporting Standards (ESRS) have been simplified. EFRAG, the body responsible for drafting the ESRS, drawing on the experience of companies that began reporting in 2024 and on a public consultation with over 700 respondents, amended the standards to make them more flexible, clearer and easier to apply, with a 61% reduction in mandatory data points. The first proposal was submitted to the Commission on 3 December. The simplification of the ESRS must be completed by June 2026.

• A review clause of the CSRD scope has been introduced for 2029.

Amendments to the Corporate Sustainability Due Diligence Directive (CSDDD)

• The CSDDD will apply only to companies with more than 5,000 employees and an annual net turnover exceeding €1.5 billion.
  In addition to European companies, the obligation remains for non-EU companies exceeding an annual net turnover of €1.5 billion in the EU.

• Companies covered will be able to request information from companies operating in their value chain that are not subject to the CSDDD only if it is not possible to obtain the information necessary for an in-depth assessment in another way.

• Maximum applicable penalties are reduced to 3% of the company’s global turnover.

• The harmonised civil liability regime is removed. The minimum EU-level harmonised civil liability regime provided for common rules on civil liability at the Community level. The harmonised regime has been repealed by Omnibus I, while national civil liability, based on Member States’ domestic laws, remains in force.

• The risk-based approach is confirmed. Companies will be required to carry out an analysis to identify points in their value chain where negative impacts are most likely and severe. In such cases, due diligence, prevention, and mitigation activities must then be carried out in line with international standards.

• Climate transition plans ensuring the compatibility of a company’s business model with the transition to a sustainable economy will no longer be required. A climate transition plan is a strategy that defines how a company intends to achieve its climate targets, focusing on the reduction of greenhouse gas emissions. The purpose of this disclosure is to enable an understanding of the company’s past, present, and future mitigation efforts, ensuring that its strategy and business models are aligned with the transition to a more sustainable economy, in line with the objective of limiting global warming to 1.5°C, in accordance with the Paris Agreement and climate neutrality targets. Companies will still be required to report their plans under the CSRD, meaning such plans must be set out in the sustainability report, but companies will no longer be obliged to implement them, effectively hollowing out one of the most important tools for making climate commitments credible.

• A review clause of the CSDDD scope has been introduced for 2029. The due diligence directive will apply only from 26 July 2029, the date by which all EU Member States must transpose the directive into their national legal systems.

The Omnibus I package reflects a strategic political recalibration of the European sustainability agenda. Not necessarily a step backwards, but it is right to reflect on the new limits and on the political balancing act that the European legislator has sought to strike between regulatory burden, business priorities, and the transition to an economic system that integrates nature into its processes. In our view, European institutions have chosen to proceed more cautiously, accommodating concerns raised by Member States and the industrial sector.

The compromise reached signals a shift from a phase of rapid expansion of ESG tools defined by regulation to a phase of consolidation and implementation, with the aim of safeguarding the credibility of European policies in a context of increasing economic and geopolitical pressures. Omnibus I attempts to reassure companies by reducing regulatory obligations and offering more time, allowing European institutions to reaffirm their commitment, albeit at the expense of a rapid transition towards a Nature Positive economic model.

In our view, this caution does not meet the need for European companies to be more competitive on the global market. More than half of our economy’s output depends heavily on natural resources and ecosystem services, and unfortunately, nature does not follow political cycles. Ignoring this fact, together with the growing climate pressure affecting our territories, is, for us, a sign of short-sightedness.

Compliance can be postponed, but not the structural risks linked to increasingly frequent and intense extreme events. Events that put pressure on infrastructures and ecosystems that are no longer able to follow the ecological cycles on which we have built our economic activities, as demonstrated by the entire agri-food and wine supply chain. All this is happening while financial institutions, citizens, and consumers, increasingly aware, are demanding greater transparency from companies.

As previously stated, modifying and recalibrating regulations such as the CSRD and the CSDDD is entirely normal within a complex legislative process aimed at regulating markets and new systems. However, it is legitimate to ask whether the changes approved through Omnibus I are the result of a necessary regulatory adjustment to achieve the original objective, creating a harmonised and accessible European model for reporting environmental, social and governance (ESG) performance, holding companies accountable for their impacts and dependencies or whether they are instead the result of political pressures and dynamics that have little to do with the long-term competitiveness of the Union.

For us, the points included in the statement proposed by Eurosif in September 2025, following the simplifications proposed by Omnibus I, remain valid. We signed this statement together with 475 other companies, investors, and organisations, calling for a simplification of regulation that would reduce the bureaucratic burden on companies without dismantling the objectives of a legislative process capable of fostering transparency, common tools, and a more competitive context for companies committed to generating profits and well-being for communities and territories. A process capable of stimulating innovation and efficiency through greater awareness and better management of nature-related impacts, dependencies, risks, and opportunities.

What can companies do?

The past two years have shown us that European legislation has not been fully able to balance the level of political ambition with administrative feasibility and realistic enforcement mechanisms. In the hope that this represents a learning process for the Union, we believe it is useful to recall that applying the standards set out by the CSRD, even where companies no longer formally fall within its scope, can still represent an opportunity: building, with more time and less pressure, a solid and lasting model for managing and reporting impacts and dependencies. Moreover, the simplification of requirements related to the two Directives opens up the possibility for more innovative companies to expand voluntary ESG initiatives, gaining competitive advantages over others.

For more than ten years, Etifor has supported Italian and international companies in pathways to measure, manage and report nature-related risks and opportunities, in line with leading scientific and international standards and in full compliance with national and European regulations.