EU Corporate Sustainability After Omnibus – What Has Changed?

The Omnibus I Directive, entered into force on 18 March 2026, after being published in the Official Journal of the EU on 26 February 2026. This simplification package contains amendments initially proposed in February 2025 in connection with key EU laws relating to sustainability, to simplify their requirements and limit their scope, aiming to simplify reporting obligations, reduce administrative burden on businesses, and boost EU’s competitiveness.

Member States, including Cyprus, have 12 months from 18 March 2026 to transpose the changes into national law.

The Omnibus I simplification package mainly impacts the two landmark sustainability directives, namely the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).

This legal update sets out the main amendments introduced for the CSRD and the CSDDD, as well as the Carbon Border Adjustment Mechanism (CBAM):

Corporate Sustainability Reporting Directive (CSRD)

• Application delayed by 2 years by the “Stop-the-Clock” Directive which entered into force in April 2025 (Wave 2 companies which remain in the scope begin reporting in 2028 for financial year 2027)
• Higher thresholds significantly narrowing the CSRD’s scope to:

– Companies employing 1,000 employees and generating a net annual turnover of €450 million

– Νon-EU companies with net turnover of over €450 million generated in the EU (and their subsidiaries and branches generating turnover of over €200 million in the EU)

– Firms with fewer than 1,000 employees will not have to provide information to their bigger business partners beyond what is included in the voluntary reporting standards

• European Sustainability Reporting Standards will be revised and simplified
• Sector-specific standards have been removed – sector-specific reporting is now voluntary
• Only limited assurance will be required (as opposed to reasonable assurance)

Corporate Sustainability Due Diligence Directive (CSDDD)

• Implementation delayed by 1 year (effective for in-scope companies as of 26 July 2029)
• Higher thresholds limiting the CSDDD’s scope to:

– Companies employing 5,000 employees & generating a net annual turnover of €1.5 billion

– Non-EU companies generating a net annual turnover of €1.5 billion in the EU

• Scope of the “value-chain” has been narrowed, therefore companies’ due diligence shall focus on their own “chain of activities” and direct business partners (and only extend to indirect partners in certain circumstances)
• Climate transition plans no longer need to be implemented
• Reduced monitoring frequency (monitoring and diligence assessments are mandatory once every 5 years, rather than every year)
• No EU-wide harmonised liability for breaches: liability / fines will be determined by each member state under national law

Carbon Border Adjustment Mechanism (CBAM)

• New mass-based threshold of 50 tonnes, resulting in companies importing less than 50 tonnes of goods subject to CBAM annually will be exempt from CBAM obligations
• Deadline for the purchase of CBAM certificates is postponed until 1 February 2027
• Simpler calculation for emissions

As a result of the narrower scope and the reduced obligations of the CSRD and the CSDDD post-Omnibus, a large number of companies that were previously within scope may no longer be subject to the same.

Companies should therefore reassess whether they fall within the revised scope.

Despite the amendments, the sustainability momentum in Europe remains strong and companies need to either continue working towards their obligations, or remain proactive with their sustainability efforts. Forward-thinking companies know that commitment to sustainability is an important element in any modern business, rather than a mere compliance box.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.