The EU Council approves the Omnibus I amendments

On February 24, the EU Council approved the Omnibus I amendments, significantly narrowing the scope of the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), as well as limiting the trickle-down effect of these obligations on smaller companies that are outside the direct scope of these directives.

Amendments to the CSRD

• The scope of the directive has been narrowed to companies with at least 1,000 employees and a turnover of at least EUR 450 million, and listed SMEs have been excluded from the scope entirely

• The European Commission must review the significantly simplified ESRS within the next 6 months

• The development of sector-specific standards has been removed

• Companies outside the CSRD scope may refuse to provide information beyond that specified in the Voluntary Sustainability Reporting Standard (VSME).

Amendments to the CSDDD

• The scope of the directive has been narrowed to companies with at least 5,000 employees and a turnover of at least EUR 1.5 billion
• Mandatory transition plans for climate change mitigation have been removed
• A common EU approach to corporate civil liability for human rights and environmental incidents in value chains has been removed, but it can be included in national legislation
• Companies within the CSDDD scope are encouraged to use information that is available without undue cost or effort, rather than systematically requesting information from smaller companies in the value chain.

The amending directive has been published in the EU Official Journal on February 26 and enters into force 20 days after the publication. Once the directive enters into force, EU Member States have one year to transpose it into national law (except for Article 4, which extends the deadline for transposition of the CSDDD to 26 July 2028).

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