EU Omnibus Package 2026: CSRD Scope Reduced by 80% — What Changed and Who Is Still In Scope

The EU Omnibus Simplification Package entered into force on 19 March 2026 — the day this guide was published. If your company was planning for CSRD reporting obligations, everything has changed. Approximately 80% of companies that were previously in scope are now exempt. This guide explains what the Omnibus changes, who is still in scope, what the new deadlines are, and what companies must do now.

What Is the EU Omnibus Package?

The EU Omnibus Simplification Package (formally, the Omnibus I Directive) is a sweeping reform of EU sustainability regulation adopted to reduce administrative burden on European companies and improve EU competitiveness. It amends four major pieces of legislation simultaneously:

• CSRD — Corporate Sustainability Reporting Directive
• CSDDD — Corporate Sustainability Due Diligence Directive
• EU Taxonomy Regulation — Taxonomy reporting obligations for non-financial information
• SFDR — minor conforming amendments (major SFDR reform via separate SFDR 2.0 proposal)

Legislative timeline:

Event	Date
European Commission proposal	26 February 2025
Council–Parliament political deal	9 December 2025
European Parliament adoption	16 December 2025
Council adoption	24 February 2026
Publication in Official Journal	26 February 2026
Entry into force	19 March 2026
Member State transposition deadline	18 March 2027

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CSRD: What Changed

1. Scope Reduction — The Core Change

The original CSRD scope required all large companies (defined as meeting 2 of 3 criteria: 250+ employees, €40M+ net turnover, €20M+ balance sheet) to report. The Omnibus dramatically narrows this.

New CSRD scope (post-Omnibus):

Criterion	Old CSRD	New (Omnibus)
Employees	250+	>1,000
Net turnover	€40M+ (one of two)	>€450M (mandatory)
Balance sheet	€20M+ (one of two)	Not required
Logic	2 of 3 criteria	Both employee AND turnover criteria

A company is now in scope only if it has more than 1,000 full-time equivalent employees AND more than €450 million in net annual turnover. Both criteria must be satisfied simultaneously.

Non-EU companies are in scope if they generate more than €450M in net turnover in the EU AND have either an EU subsidiary with >€200M net turnover or an EU branch with >€40M net turnover.

2. Who Is Now Exempt

The Omnibus removes approximately 80% of companies that were previously in scope:

• All Wave 3 companies (listed SMEs) — completely removed from scope
• Wave 2 companies (large companies with 250–1,000 employees or below €450M turnover) — exempt unless meeting both new thresholds
• Financial holding companies — explicitly exempted
• Large companies below the €450M turnover threshold, even if they have >1,000 employees

Wave 2 companies (original reporting start: FY 2025, first reports due 2026) are delayed by two years and will report on FY 2027 data (due in 2028) — but only if they still meet the new higher thresholds.

3. Who Remains In Scope

You must still report under CSRD if your company:

1. Has more than 1,000 FTE employees, AND
2. Has more than €450M net annual turnover

This typically covers:

• Large multinational corporations (banks, insurance groups, major industrials)
• EU subsidiaries of non-EU groups meeting the EU revenue threshold
• Companies that were already reporting under Wave 1 (public interest entities with 500+ employees) and still meet the new thresholds

Wave 1 companies (public interest entities with 500+ employees, reporting on FY 2024 data due in 2025) may be temporarily exempted from FY 2025–2026 reporting at national level — but only if the Member State exercises this option in its transposition law.

4. ESRS Simplification: From 1,073 to 320 Data Points

For companies that remain in scope, the reporting burden is substantially reduced:

• Original ESRS data points: 1,073
• Simplified ESRS data points: 320 (a 70% reduction)
• Assurance level: Limited assurance only (no transition to reasonable assurance)
• Materiality assessment: Streamlined — companies report only on material sustainability issues

The simplified ESRS delegated act is expected by September 2026, with the first reports under simplified ESRS covering FY 2027 (due in 2028).

5. Value Chain Reporting Cap

SMEs with ≤1,000 employees are no longer required to provide sustainability data beyond voluntary standards when requested by larger CSRD-reporting companies. This was one of the most significant concerns for small suppliers.

Larger companies still in scope must limit what they request from their supply chains to what is proportionate. Effectively, the "trickle-down" pressure on SMEs from large companies is capped.

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CSRD Reporting Timeline: Updated Wave-by-Wave

Wave	Original Scope	Reporting Start	Omnibus Status
Wave 1	Public interest entities >500 employees	FY 2024 (reports due 2025)	May be temporarily exempt for FY 2025–2026 (Member State option)
Wave 2	Large companies >250 employees	FY 2025 (reports due 2026)	Delayed 2 years → FY 2027 (reports due 2028), only if still in new scope
Wave 3	Listed SMEs	FY 2026 (reports due 2027)	Completely removed from scope
Non-EU	Groups with >€150M EU turnover	FY 2028 (reports due 2029)	Threshold raised to €450M EU net turnover

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EU Taxonomy: What Changed

Under the original Taxonomy Regulation, companies in CSRD scope had to disclose Taxonomy alignment (Green Asset Ratio, Taxonomy-eligible CapEx/OpEx/Turnover).

Post-Omnibus:

• Companies that fall out of CSRD scope under the new thresholds → Taxonomy reporting becomes optional
• Companies still in CSRD scope → Taxonomy reporting remains applicable
• The Taxonomy scope is now fully aligned with the new CSRD thresholds

This means the narrowed CSRD scope automatically narrows the Taxonomy reporting obligation.

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CSDDD: What Changed

The Corporate Sustainability Due Diligence Directive is also substantially amended:

Element	Original CSDDD	Omnibus CSDDD
Employee threshold	1,000+ employees	5,000+ employees
Net worldwide turnover	€450M+	€1,500M+
Non-EU companies	€450M EU turnover	€1,500M EU turnover
Member State transposition	26 July 2026	26 July 2028

The significantly higher thresholds remove the vast majority of companies that were previously in scope. Only the largest multinational corporations remain subject to mandatory human rights and environmental due diligence obligations.

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SFDR: What Is and Is Not Changing

The Omnibus makes minor conforming amendments to SFDR to align it with the new CSRD/Taxonomy scope — for example, adjusting cross-references and definitions.

The major SFDR reform (SFDR 2.0) is a separate legislative process:

• Commission proposal published: November 2025
• Expected entry into force: mid-2027
• Application start: end of 2028
• Key change: Replaces Article 8/Article 9 classifications with three categories (Sustainable, Transition, ESG Collection)

See our SFDR 2.0 guide for details on the separate reform.

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Is My Company Still In Scope? A Decision Tree

Step 1: Does your company (or EU-consolidated group) have more than 1,000 FTE employees?

• No → Out of scope under Omnibus. CSRD reporting is not mandatory.
• Yes → Continue to Step 2.

Step 2: Does your company (or EU-consolidated group) have more than €450M in net annual turnover?

• No → Out of scope under Omnibus. CSRD reporting is not mandatory.
• Yes → In scope. Proceed to Step 3.

Step 3: Are you a public interest entity with >500 employees that was already reporting (Wave 1)?

• Yes → You may still be in scope for FY 2024 reports (already due). Check whether your Member State will grant temporary exemption for FY 2025–2026. If you now fall below the new thresholds, you may be able to pause after FY 2024.
• No → You will report on FY 2027 data (first report due in 2028) under the simplified ESRS.

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What Companies Must Do Now

If you are now out of scope:

1. Assess your position — verify against the new 1,000 employees / €450M turnover thresholds using your most recent consolidated figures
2. Communicate internally — legal, finance, and sustainability teams need to know that mandatory CSRD reporting is no longer required
3. Review existing commitments — if you have already started CSRD readiness work, consider whether voluntary reporting under GRI, ISSB, or the voluntary ESRS standard (VSME for SMEs) makes commercial sense
4. Check supply chain obligations — you may still receive data requests from in-scope customers. Under the Omnibus, your obligation to respond is now capped to "voluntary standards"
5. Monitor Member State transposition — the Omnibus must be transposed by 18 March 2027. Some Member States may impose stricter rules or maintain voluntary frameworks

If you remain in scope:

1. Continue or begin CSRD implementation — Wave 1 companies should maintain FY 2024 reporting on schedule; Wave 2 companies have until FY 2027 under the simplified ESRS
2. Plan for simplified ESRS — the new delegated act with ~320 data points is expected by September 2026. Align your data collection with the simplified framework rather than the original 1,073-point ESRS
3. Reassess materiality — the simplified ESRS focuses on material issues. Update your double materiality assessment to reflect the reduced scope
4. Review value chain data requests — adjust what you request from suppliers in line with the proportionality principle and the SME cap
5. Watch for Member State implementation — transposition may add local nuances, particularly regarding auditor/assurance requirements and enforcement

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Why This Matters for Compliance Teams

The Omnibus is not a delay — it is a fundamental reduction in scope. Unlike the two-year delays that preceded it in 2023–2024, the Omnibus changes the permanent architecture of EU sustainability reporting.

For companies now out of scope: the immediate compliance burden is lifted. But the shift is also market-driven. ESG ratings agencies, institutional investors, and large corporate customers will continue to request sustainability data — the difference is that the legal obligation is gone. Voluntary frameworks (GRI, ISSB S1/S2, VSME) become more commercially relevant.

For companies still in scope: the simplified ESRS is a meaningful reduction in compliance cost. The 70% cut in required data points, combined with the limited assurance standard, should materially reduce reporting costs compared to original projections.

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Key Dates Summary

Date	Event
19 March 2026	Omnibus enters into force
Q2 2026	Simplified ESRS consultation begins
September 2026	Simplified ESRS delegated act (target)
18 March 2027	Member States must transpose Omnibus
FY 2027	First year under new scope and simplified ESRS
2028	First reports on FY 2027 data due

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The EU Omnibus is the most significant change to EU sustainability reporting since CSRD was adopted in 2022. Companies that were preparing for reporting obligations starting in 2025–2026 now have both relief and new planning decisions to make. Use our platform to query the underlying regulation texts — Taxonomy Regulation, CSRD, and CSDDD — and get precise answers tailored to your entity type and jurisdiction.