On February 26, 2025, the European Commission presented a legislative package known as "Omnibus," which aims to simplify ESG (Environmental, Social, Governance) reporting rules and reduce the administrative burden on companies. This step responds to concerns that current regulations may be too demanding and restrictive for businesses.
Key changes proposed under the Omnibus:
1. Narrowing the scope of entities subject to CSRD
- The sustainability reporting obligation would now only apply to large companies with more than 1,000 employees that meet at least one of the following financial criteria:
- Annual turnover of more than EUR 50 million, and/or
- Balance sheet total of over EUR 25 million.
This measure could reduce the number of companies subject to CSRD by approximately 80%.
2. Postponement of the obligation to prepare ESG reports
- The proposal provides for a two-year postponement of reporting for large accounting entities, with the first reporting required for 2027 in 2028.
3. Changes to corporate due diligence (CSDDD)
- Postponement of the implementation of the Corporate Sustainability Due Diligence Directive by one year to 2028.
- Limitation of the obligation to screen supply chains to direct suppliers only, which could increase the risk of human rights and environmental standards being violated in wider supply chains.
4. Simplification of ESRS standards
- The European Commission plans to revise the European Sustainability Reporting Standards (ESRS) to reduce the number of mandatory data points and prioritize quantitative data over textual descriptions.
5. Amendment of reporting verification rules
- Companies will still be required to have their sustainability reports verified by an independent auditor, but only limited assurance will be required. This change eliminates the possibility of stricter verification requirements in the future.
Impact on Czech companies:
Despite the proposed changes, the current legislation remains in force. Companies should comply with the applicable laws of the countries in which they operate, including the CSRD and its transposition into the legal systems of the member states. However, in the Czech Republic, the transposition has only been partial, which creates a high degree of uncertainty among domestic companies.
