Navigating CSRD Reporting and the Omnibus: What Companies Should Know

The European Union’s Corporate Sustainability Reporting Directive (CSRD) requires certain entities doing business in the EU to report and obtain assurance over specified sustainability information. For many companies, this means establishing new processes, procedures, and controls that may demand substantial investment — despite potential scope and other modifications to the CSRD under the recent Omnibus package of proposals (“the Omnibus”).

Read on to learn more about the CSRD’s impact on companies, as well as what the Omnibus could change.

What Does the Omnibus Propose, and When Will Its Changes to the CSRD Become Final?

Introduced by the European Commission in February 2025, the Omnibus proposes changes to the CSRD’s scope and requirements. EU lawmakers are currently considering the proposals and are making additional revisions. Amendments to the CSRD under the Omnibus are expected to be finalized by Q1/Q2 2026. EU member states will then have 12 months to transpose the requirements into national law.

EU lawmakers have already adopted a “Stop-the-Clock” directive, which grants a two-year extension to companies in reporting Waves 2 and 3 (see table below for revised dates).

What Companies Must Comply with the CSRD, and When are Reports Due?

Fewer companies would need to comply with the CSRD under the Omnibus. The table below reflects the CSRD’s current scoping requirements and amendments proposed under the Omnibus. (Subsequent ‘Omnibus’ mentions in this article also reference the Commission’s version of the proposal.) Note that revisions to the CSRD are being evaluated as part of the ongoing legislative process, and final scoping and requirements could differ to those currently proposed. 

The CSRD takes a phased-in approach to compliance, and Wave 1 reporting has already begun. Compliance dates, including extensions already in effect for entities in Waves 2 and 3, are below.

¹For each of the last two consecutive fiscal years

²EU Branch: >€40M revenue

³EU large subsidiary: Two of the following – 

• >250 employees
• >€50M revenue
• >€25M assets

⁴EU Branch: >€50M revenue

What are the CSRD’s Current Requirements?

Currently, the CSRD requires companies to report sustainability information that aligns with the set of European Sustainability Reporting Standards (ESRS) applicable to their company size and type. Entities in Waves 1, 2, and 3 must also report in alignment with Article 8 of the EU Taxonomy Regulation, which requires companies to disclose how and if their activities are environmentally sustainable. Limited assurance must be obtained over all of these disclosures, with the possibility that regulators could raise assurance requirements to a reasonable level at a future date.

How Would Reporting and Assurance Requirements Change Under the Omnibus?

The Omnibus would remove the potential for future reasonable assurance over sustainability information, keeping requirements at the limited assurance level. Changes are also being proposed to the ESRS to simplify and streamline sustainability reporting requirements, and the scope of Taxonomy reporting would be narrowed, applying to fewer companies and offering greater flexibility in how the requirements are met. 

Some notable considerations for ESRS and Taxonomy reporting are set out below.

• Sector-agnostic ESRS: Reporting aligned with the sector-agnostic ESRS (i.e., full set of ESRS) is mandatory for companies in CSRD compliance Waves 1 and 2. These standards are being revised and simplified, with proposed amendments reducing the number of mandatory data points by nearly 60%.  
  
  Notably, the Omnibus maintains CSRD requirements for double materiality reporting. This means that companies reporting against the full set of ESRS must consider both the influence that sustainability-related factors have on their financial risks and opportunities (financial materiality) and the impacts that their business has on the environment and people (impact materiality).
• Listed SME ESRS (LSME) and Sector-Specific ESRS: The Omnibus would cancel plans to adopt a separate set of ESRS for companies in Wave 3, which would no longer need to comply with the CSRD. The Omnibus would also cancel plans for sector-specific ESRS.
• ESRS for non-EU Groups (NESRS): Companies in Wave 4 (non-EU groups) must report using a separate set of standards, the NESRS. These standards are under development; however, the project is paused while the full set of ESRS is being simplified. 
• Voluntary Sustainability Reporting Standard for non-listed SMEs (VSME):  Although not officially part of the CSRD, the VSME was published to help standardize sustainability reporting  for non-listed micro, small, and medium enterprises. These entities are outside the scope of the CSRD but often receive requests for sustainability information from customers and financiers. 
  
  Under the Omnibus, the VSME would be used as the basis for a future voluntary standard to be adopted by the Commission via a delegated act. Information requests from companies in scope of the CSRD to smaller companies (up to 1,000 employees) in their value chain would be limited to the contents of this to-be-developed standard, with limited exceptions. It should be noted that the voluntary reporting standard’s contents may differ from the VSME and will also depend on the final agreement of co legislators regarding the new scope of application of sustainability reporting requirements, and on the revision of the full set of ESRS.
• EU Taxonomy Reporting: The Omnibus would modify the CSRD’s Taxonomy reporting requirements to make Article 8 disclosures mandatory only for companies with more than 1,000 employees and that have more than €450 million in revenue. It would also introduce more flexible Article 8 disclosure options for companies in the CSRD’s scope that have Taxonomy-aligned activities but have revenue of €450 million or less.
  
  Additionally, the Taxonomy would be amended so that undertakings would only need to assess Taxonomy eligibility and alignment for activities deemed financially material — defined as those contributing at least 10% to the denominator of each relevant KPI (revenue, capital expenditures, or operating expenses).

How Could the Omnibus Impact CSRD Compliance for U.S. Companies? 

There are two scenarios through which a U.S. company could be required to comply with the CSRD –  (1) if it lists its securities on an EU-regulated market, or (2) if it has significant EU business. The Omnibus would impact size thresholds for companies in both of these scenarios, with applicability as follows:

• Listed Securities: A U.S. company that lists its securities on an EU-regulated market would need to report under the CSRD in 2028 (fiscal year 2027 data) if it meets the following criteria the last two consecutive financial years: more than 1,000 employees (on average during the fiscal years) and either revenue greater than €50 million or assets greater than €25 million. Amount thresholds cover global operations and, if the company is a parent company, are calculated on a consolidated basis.
  
  The company would use the full set of ESRS to report. Article 8 Taxonomy disclosures would also be required if revenue exceeds €450 million.
• Significant EU business: A U.S. company would need to report under the CSRD in 2029 (fiscal year 2028 data) if at the group level (or if not applicable, at the individual level), the revenue it generates in the EU exceeds €450 million for each of the last two consecutive fiscal years, and if scoping requirements are also met by its EU branch (revenue greater than €50 million in the preceding financial year) or subsidiary (two of the three: more than 250 employees on average during the fiscal year, revenue greater than €50 million, or assets greater than €25 million). 
  
  The company would report using the NESRS, and it would not be required to issue Article 8 Taxonomy disclosures. The company would have the option of reporting using the full set of ESRS, which could exempt certain of its EU subsidiary(ies) also in the CSRD’s scope from separate reporting requirements. These subsidiary(ies) would still be required to make Article 8 Taxonomy disclosures available, if their revenue exceeds €450 million.
  
  

Additionally, a U.S. company could also be asked for sustainability-related information if it is a supplier to a company that is in scope of the CSRD. If the U.S. company is below scope itself for mandatory CSRD reporting, it can use the VSME standard referred to above to provide the requested information.

What Can Companies do to Prepare? 

Preparing for sustainability reporting and an ESG assurance engagement, especially during the initial year, is a highly technical and multi-faceted process. Despite potential rollbacks under the Omnibus, preparing for CSRD reporting is a significant undertaking for most companies. 

To prepare, companies should proactively determine and plan for various scenarios of Omnibus applicability. For companies that still expect to be in scope, next steps could include creating a working group to review the requirements, determine what data is available, and identify any gaps. Undergoing an assurance readiness assessment can also help ease the rigor of a first-year assurance engagement. Assurance readiness includes establishing and/or reviewing processes and controls around data; assessing the rigor, approach, and methodology for calculations; and considering the basis and support for significant estimates.

Working a pilot test into the compliance timeline may also be beneficial to uncover any remaining areas that need to be addressed. For Wave 2 and Wave 4 companies, this would take place in 2027 (using fiscal year 2026 data) and in 2028 (fiscal year 2027 data), respectively. Under the Omnibus, Wave 3 companies would no longer need to report.

Beyond Compliance, How Can Sustainability Reporting and Assurance Add Business Value?

Reporting and obtaining assurance over sustainability information can serve as a competitive differentiator for companies, often providing value that extends beyond compliance with the CSRD or other sustainability disclosure laws, like California’s climate reporting requirements. 

For example, obtaining and analyzing sustainability-related data can help companies pinpoint opportunities for operational efficiencies and cost savings. Uncovering sustainability-related risks can help companies prepare more comprehensive plans to help ensure business continuity. Companies who leverage sustainability data to inform development of new products and services create competitive advantage while supporting communications with investors and other stakeholders.

Likewise, the ESG assurance process can identify ways to help strengthen internal controls, processes, and information quality. This enhances a company’s credibility and may also be necessary to support M&A due diligence or help qualify for sustainability-linked bonds or loans. 

BDO can help companies navigate CSRD reporting while identifying opportunities associated with embedding sustainability into business strategy and operations. Contact BDO's Sustainability Center of Excellence to learn more.