CSRD Regulatory Update

What is Omnibus all about and what does it mean for my business?

February 2025

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CSRD: Key Changes and Implications

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1. Reducing the Scope: Fewer Companies Involved

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The proposed changes significantly narrow the scope of CSRD:

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• Company Size Threshold: Increased from 250+ employees and €50m turnover to >1,000 employees and €450m turnover
• Companies Covered: Reduced from >50,000 to <7,000 companies
• Third Country Threshold: Raised from €150m to €450m turnover

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What this means for you: Many medium-sized companies that were previously preparing for compliance may now find themselves outside the scope of the directive. This represents a substantial reduction in the scope of the regulation.

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2. Relaxation of Reporting Requirements

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Several reporting requirements have been relaxed:

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• Value Chain Reporting: Previously required to collect data from all suppliers; the proposed change removes the need to obtain data from non-CSRD companies
• Assurance Requirements: ‘reasonable assurance’ requirement removed, retaining only limited assurance
• Reporting Deadlines: Potential delays of up to two years for initial disclosures and audits

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What this means for you: Companies still in scope will face less stringent reporting requirements and have more time to prepare, potentially reducing compliance costs and administrative burden.

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3. Standards and Materiality

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• Dual Materiality: Maintained both financial and impact materiality requirements
• ESRS Sector Standards: Previously mandatory sector reporting standards now ‘suspended or cancelled’

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What it means for you: While the principle of dual materiality remains unchanged, the potential removal of sector standards could simplify reporting for companies in specialised sectors.

"While regulations are evolving, the business case for sustainability based on data and transparency remains in act. Companies that continue their journey gain competitive advantages through risk management, operational efficiency, and market differentiation—regardless of compliance thresholds."

Alexandra Pelka

CSDD: Important Relaxation of Due Diligence Requirements

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The CSDD has undergone even more substantial changes:

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1. Reduced Scope of Due Diligence

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• Value Chain Coverage: Reduced from the entire value chain to direct suppliers only
• Supplier Risk Assessment: Limited to direct suppliers and only when plausible risk information exists
• Monitoring Frequency: Reduced from annually to once every five years

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What this means for you: Significantly reduced due diligence requirements, focusing only on first-tier suppliers instead of the entire value chain.

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2. Requirements Eliminated

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Several previously imposed requirements have been completely removed:

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• Contract Termination: no longer required to terminate contracts with non-compliant suppliers
• Civil Liability: Liability provisions for non-compliance removed
• Due Diligence in the Valley: Requirements for financial institutions removed
• Penalties: Provision for minimum penalties (5% of global turnover) removed

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What It Means For You: Reduced legal and financial risks, with more flexibility in supplier relations and compliance approaches.

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3. Changes to the Compliance Approach

• Transition Plans: Companies only need to adopt plans, not implement them
• Harmonisation: More stringent national requirements may no longer be allowed in key areas, moving towards greater harmonisation at EU level

What it means for you: More flexibility in implementation, with potentially less variation in requirements between EU member states.

EU Taxonomy: Potential Voluntary Approach

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• Taxonomy reporting: Potential to become voluntary for CSRD companies

• DNSH rules: Could be simplified according to the EU Platform on Sustainable Finance

What it means for you: Potential reduction of mandatory classification requirements, allowing more flexible approaches to sustainability reporting.

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Next Steps and Support from AP Projects

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It is important to note that these changes come from leaked drafts and may not reflect the final regulatory changes. The European Commission has not yet officially confirmed these changes.

AP Projects will continue to monitor these developments closely and will provide timely updates as soon as official information is available. Our team remains available to help you

Despite potential regulatory changes, it is crucial to continue your sustainability journey: analysing risks and opportunities, reducing operating costs through energy and resource efficiency, accessing new markets and funding (calls for tenders), improving corporate reputation, and attracting investors and talent represent concrete competitive and economic advantages that go far beyond mere regulatory compliance.

For customised guidance on how these potential changes could affect your specific operations, please contact your AP Projects consultant.

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Disclaimer: This analysis is based on leaked draft information and may not reflect final regulatory changes. Companies should continue their compliance preparations until the changes are officially published.

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