EU’s Omnibus Proposal: Stop the Clock! EU Parliament to Approve the Sustainability Reporting Delays in Exceptional Urgent Procedure

The European Parliament has approved the Commission’s proposal postponing the dates of application of certain corporate sustainability reporting and due diligence requirements, as well as the deadline of national implementation of the due diligence provisions (the “Directive”) under the urgent procedure which gives the proposal priority over other items on the Parliament’s agenda. The Directive was adopted by the Parliament on 3 April 2025 by a clear majority.

The Directive forms part of the first Omnibus package adopted by the Commission at the end of February 2025 and is designed to harmonise and simplify the reporting requirements of the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU taxonomy, and to eliminate overlapping regulations. The Directive only contains provisions on the timetable for the application of sustainability reporting; the rest of the first Omnibus package, including the scope changes, will be negotiated in a separate process.

As the Directive only applies to Wave 2 and 3 companies, companies that have been reporting since 2024 must continue reporting as before and wait until the substantive changes to the CSRD have been approved in the legal process to determine whether they are still subject to the sustainability reporting obligation.

Next, the final legal text of the Directive will need to be formally approved by the European Council. The approval is expected to be only a formality as the Council already agreed to support the proposal on 26 March 2025. The Directive will enter into force the next day after it has been published on the Official Journal of the European Union after which the EU member states have until 31 December 2025 to transpose the Directive into national law.

Following the agreement on the Directive, the rest of the first Omnibus package including substantive changes to the CSRD, CSDDD and EU taxonomy will move on to negotiations between the EU legislators. The timetable for the process is still uncertain although the proposed deadline for the transposition is set at 31 December 2025. The proposed deadline for the CSDDD’s transposition is set at 26 July 2027.

In connection with the first Omnibus package, the European Commission has already officially tasked EFRAG (The European Financial Reporting Advisory Group) with simplifying the ESRS reporting standards with a tight deadline: EFRAG is to deliver its advice already by 31 October 2025. The revised ESRS will be implemented via a delegated act no later than six months after the entire first Omnibus package enters into force.

Our experts will be following the legislative developments and will keep you informed. If you have any questions, please feel free to contact the undersigned or your regular Borenius contact.