On 26 February 2025, the European Commission adopted the "Omnibus Simplification Package" — a bundle of legislative proposals that dramatically reduces the scope and complexity of EU sustainability reporting and due diligence requirements. If you have been preparing for CSRD, these changes directly affect your timeline and obligations.
What Is the Omnibus Package?
The Omnibus package modifies three major EU regulations simultaneously: CSRD (reporting), CSDDD (due diligence), and the EU Taxonomy (green classification). The goal is to reduce administrative burden on European businesses — particularly SMEs — while maintaining the EU's sustainability transparency objectives.
The Omnibus simplification responds to widespread pushback from business lobby groups and EU member states that argued the original regulations imposed disproportionate compliance costs, especially on mid-sized companies.
Key Changes to CSRD
The most impactful changes relate to who must report:
| Change | Before Omnibus | After Omnibus |
|---|---|---|
| Companies in scope | ~50,000 | ~5,000 (80% reduction) |
| Employee threshold | 250+ employees | 1,000+ employees |
| Revenue threshold | €40M+ | €50M+ |
| Listed SMEs | Mandatory from FY2026 | Voluntary (no longer required) |
| Value chain reporting | Extensive Scope 3 & supply chain data | Simplified — capped data requests to SMEs |
- Companies with 250-999 employees are removed from CSRD scope entirely
- Listed SMEs can choose to report voluntarily using the LSME standard but are no longer mandated
- A 2-year delay was introduced for companies still in scope that had not yet started reporting
- ESRS data points are expected to be reduced by up to 70% through delegated act revisions
Impact on SMEs and VSME
Paradoxically, the Omnibus changes may make VSME more important, not less. Here is why:
- Fewer companies are legally required to report, but the data still needs to flow through supply chains
- The ~5,000 largest companies still under CSRD will concentrate their reporting efforts and data requests on their key suppliers
- The Commission explicitly endorsed VSME as the "voluntary cap" on what large companies can ask SMEs to provide
- SFDR data requirements for banks and investors remain unchanged — they still need ESG data from portfolio companies
The Omnibus proposal explicitly references VSME as a safe harbour standard for SMEs receiving data requests from CSRD-reporting companies. This means if you complete a VSME report, no customer can demand more data than what VSME covers.
What Should You Do Now?
- Check if you are still in scope — if your company has fewer than 1,000 employees and is not listed, you are likely out of CSRD scope
- Even if out of scope, prepare for data requests from customers and banks — VSME is your tool for this
- Do not stop any sustainability work already in progress — the data you collect remains valuable for financing and commercial purposes
- Monitor the legislative timeline — the Omnibus proposals must still be approved by the European Parliament and Council
- Consider VSME as a competitive advantage — proactive reporting signals maturity to partners and investors
The Omnibus proposals are expected to be finalised by late 2025 or early 2026. Until then, the original CSRD rules technically remain in force, though the Commission has encouraged national regulators not to enforce the original timeline for newly de-scoped companies.