Over the past years, the framework of non-financial reporting in Europe has been developing dynamically. From Directive 2014/95/EU (the “NFRD”) to Directive (EU) 2022/2464 (the “CSRD”) and further in the area of due diligence to Directive (EU) 2024/1760 (the “CSDDD”). Now another major shift is coming, namely the EU legislative package Omnibus I, as a set of measures aimed at simplifying and targeting obligations to reduce administrative burden and disproportionate impacts, especially on smaller and medium-sized entities in supply chains. The key pillar is Directive (EU) 2026/470 (hereinafter the “Omnibus Directive”), which amends the Audit Directive 2006/43/EC, the Accounting Directive 2013/34/EU, the CSRD and the CSDDD. From a practical perspective, the most important aspect is that (i) in sustainability reporting it significantly narrows the scope of enterprises that will be required to report, and at the same time (ii) in due diligence it limits obligations to the largest players, while also adjusting sanctions, monitoring and certain stringent requirements.
An interesting view of the practical impacts of the changes is also provided by a recent survey among European enterprises. According to a study by osapiens, approximately 90% of enterprises that no longer fall within the mandatory scope of CSRD plan to continue sustainability reporting or even further expand it. This is due to the fact that, for many enterprises, sustainability reporting has gradually shifted from a mere regulatory obligation to a tool for risk management, strategic decision-making and communication with investors or business partners.[1]
At the same time, almost the same percentage of enterprises expect an increase in investments in technologies and systems for the collection and processing of ESG data in the next 12 months, which indicates that even outside the mandatory regulatory framework, transparency in the area of sustainability remains a significant factor of competitiveness.
Context of changes: from the NFRD to the Omnibus I
The NFRD introduced the obligation to disclose non-financial information and information on diversity for large enterprises and groups through amendments to the Accounting Directive 2013/34/EU. This path resulted in the CSRD, which expanded the scope and monitoring of sustainability reporting and anchored it in the European Sustainability Reporting Standards (the “ESRS”), while in practice bringing a significant increase in required data points as well as procedural requirements. The Omnibus I responds to the political and economic debate on competitiveness vs. regulatory burden. Directive 2025/794 “stop-the-clock”, as the first pillar of the Omnibus I package, justifies the postponement of certain obligations by the fact that simplification initiatives are ongoing and it is necessary to avoid unnecessary costs for enterprises that would report without knowledge of the final legal framework. The second pillar, the Omnibus Directive, then brings a substantive intervention into the regulation of reporting and due diligence.
What is the Omnibus Directive and what is its timeline?
The Omnibus Directive was adopted by the European Parliament and the Council of the European Union on 24 February 2026 and entered into force on 18 March 2026. The transposition period is divided according to whether it concerns the reporting section or the due diligence section: (i) amendments to the audit and reporting branch (i.e. 2006/43/EC, 2013/34/EU and CSRD) are to be transposed by Member States into national law by 19 March 2027, and (ii) amendments concerning due diligence (i.e. CSDDD) are to be transposed by Member States by 26 July 2028.
Sustainability reporting after the Omnibus I: changes in Directive 2013/34/EU and CSRD
The Omnibus Directive intervenes in non-financial reporting through the Accounting Directive 2013/34/EU, in particular through Articles 19a and 29a in the section concerning sustainability reporting, and at the same time amends selected provisions of the CSRD itself as an amending directive.
The most practically significant change is the fundamental narrowing of the scope of entities that will be required to report sustainability:
- Individual reporting (Art. 19a of the Accounting Directive): the obligation applies to enterprises which, as at the balance sheet date, exceed net turnover of EUR 450,000,000 and an average of 1,000 employees during the financial year.
- Consolidated reporting (Art. 29a of the Accounting Directive): analogously to parent undertakings of a group which, on a consolidated basis, exceed net turnover of EUR 450,000,000 and an average of 1,000 employees during the financial year.
End of reporting for listed small and medium-sized enterprises (“SMEs”) and the value chain with a right to refuse
Article 19a of the Accounting Directive is supplemented with a definition of the term “protected undertaking” (i.e. a non-mandatory entity, ≤ 1,000 employees) and the term “voluntary standards”. A reporting undertaking may rely on a supplier’s own declaration to determine a “protected undertaking” and is not obliged to actively verify it unless the declaration is manifestly incorrect. “Protected undertakings” also have the right to refuse to provide information beyond voluntary standards, and contractual arrangements contrary to this rule are not binding. An analogous construction is used also for consolidated reporting, i.e. also for requirements arising from group reporting.
The Directive also abolishes the special regime for SMEs whose securities are admitted to trading on a regulated market in the EU.
Voluntary standards under the new Article 29ca of the Omnibus Directive
The Omnibus Directive introduces a new Article 29ca, namely standards for sustainability reporting for voluntary use. The aim is to facilitate voluntary reporting for enterprises with up to 1,000 employees and at the same time to define the scope of information that may be required from these entities within the value chain. The Commission is to adopt these voluntary standards by means of delegated acts by 19 July 2026 and subsequently review them at least every four years. In the review, it is to take into account technical advice from EFRAG. Until the adoption of these voluntary standards, the Directive explicitly refers to the possibility to voluntarily report according to Commission Recommendation (EU) 2025/1710, which is based on the voluntary standard for SMEs prepared by EFRAG.
ESRS: revision within six months and abolition of sectoral standards
The Omnibus Directive contains a clear political mandate. The first set of ESRS was adopted in July 2023 and now an amendment is to be adopted within six months from the entry into force of this Directive (i.e. by 18 September 2026), which will substantially reform ESRS, in particular by removing the least important data points, prioritising quantitative data over narrative text, clarifying the work with materiality and strengthening interoperability with global standards. The adoption of revised standards should also significantly contribute to clarifying the scope of information obtained from non-mandatory entities in the value chain.
At the same time, the adoption of sectoral standards is abandoned. Instead, the Directive calls on the Commission to create sectoral guidance which should illustrate the application of ESRS in a given sector. However, it is already known that mandatory entities under Articles 19a and 29a of the Accounting Directive 2013/34/EU will have to include in their management reports information on how and to what extent the activities of the undertaking are associated with economic activities that qualify as environmentally sustainable. The rules for reporting environmentally sustainable economic activities are simplified by Delegated Regulation (EU) 2026/73.
Possibility to omit sensitive information and strengthening of exemptions
The Omnibus Directive expands and clarifies the categories of information which may, subject to conditions, be omitted from the sustainability report. These include, for example, information the disclosure of which would seriously prejudice the commercial position of the enterprise, information constituting know-how, intellectual property, technological information and results of innovation considered to be trade secrets, as well as classified information or other information protected by specific obligations. The undertaking is obliged to state that it applies an exemption and must, in each subsequent report, verify again that the reasons for omission still apply.
Third-country enterprises: higher thresholds and double filter
The Omnibus Directive also raises the threshold for third-country enterprises from EUR 150 million to EUR 450 million of total net turnover of the group generated in the EU for each of the last two consecutive financial years, and at the same time stipulates that the obligation is triggered for a subsidiary/branch only upon exceeding EUR 200 million net turnover of that specific EU entity.
Practical impacts – how to prepare?
From a practical perspective, enterprises should in particular (i) verify whether, after the adoption of the changes, they still fall within the scope of the CSRD, especially with regard to the adjusted thresholds and postponed phase-ins of individual reporting waves; (ii) continue preparations for ESG reporting if internal processes have already been initiated, especially in the area of data collection, internal control mechanisms and consider the possibility of voluntary reporting; (iii) use the additional time for systematic setting of ESG processes, especially for the implementation of internal methodologies for data collection according to ESRS standards; (iv) take into account the impacts of the CSRD on supply chain relationships, as large market players will continue to require ESG data from their business partners; and (v) closely monitor the development of European legislation, especially the adoption of standards for sustainability reporting for voluntary use (by 19 July 2026) and the adoption of revised ESRS (by 18 September 2026).
From the perspective of business practice, it can be expected that ESG reporting will continue to be a significant factor not only in terms of regulatory obligations, but also in terms of financing, investment decisions and relationships with business partners. The objective of the European Union is for enterprises to want to monitor data themselves, especially due to further financial advantages.
Conclusion
The Omnibus legislative package and in particular Directive (EU) 2026/470 represent a significant correction of the originally very ambitious framework of European ESG reporting. The aim is to reduce administrative burden while at the same time providing more time for quality implementation of the new rules.
For many enterprises, the current development may therefore be, to a certain extent, a relief. At the same time, however, it should be emphasised that the basic concept of the European framework of non-financial reporting remains preserved. The CSRD Directive continues to represent a key instrument for standardised disclosure of information on the impacts of business activities on the environment, society and governance. The Omnibus therefore does not mean the end of ESG reporting, but rather its temporal and scope calibration. For many enterprises, it will therefore be key to reassess the timeline for the implementation of ESG processes. The postponement of certain obligations should not lead to a complete halt of preparations, but rather to their strategic reset so that entities are able to meet the new requirements more efficiently and with less administrative burden.
[1] Segal, Mark. 90% of Companies No Longer in CSRD Scope Plan to Maintain, Expand Sustainability Reporting: Survey [online]. ESG Today, March 12 2026 [cit. 2026-03-27]. Available at: https://www.esgtoday.com/90-of-companies-no-longer-in-csrd-scope-plan-to-maintain-expand-sustainability-reporting-survey/
Mgr. Jakub Málek, managing partner – malek@plegal.cz
Mgr. Martin Zavadil, junior lawyer – zavadil@plegal.cz
Ráchel Kouklíková, legal assistant – kouklikova@plegal.cz
16. 4. 2026