Introduction

EU member states have formally approved the Omnibus I simplification package, introducing far‑reaching revisions to the European Union’s corporate sustainability framework, including the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). The agreement, concluded following negotiations between the European Parliament and the European Council, represents a substantive recalibration of the Union’s regulatory architecture for sustainability governance.

The amendments extend well beyond technical refinement. They redraw the boundaries of regulatory scope, remove or recalibrate core obligations, reshape liability and penalty mechanisms, and defer implementation timelines. Taken together, the package signals a structural adjustment in how sustainability compliance will be operationalized across the EU. This article examines the concrete regulatory modifications introduced under the final agreement.

Key Changes at a Glance

A Dramatic Reduction in Scope

What Changed in the Scope of CSRD and CSDDD?

At the heart of the Omnibus package lies a pronounced narrowing of corporate coverage under both CSRD and CSDDD.

Under the revised CSDDD, the directive will apply exclusively to EU companies with more than 5,000 employees and annual turnover exceeding €1.5 billion. Non‑EU companies generating equivalent turnover within the European Union will likewise fall within scope. The recalibrated thresholds significantly redefine the category of companies subject to mandatory supply chain due diligence obligations.

For the CSRD, reporting requirements will now apply only to companies employing more than 1,000 individuals and generating annual net turnover above €450 million. The previous threshold captured companies with more than 250 employees. The revision therefore represents a substantial contraction in the universe of reporting entities.

The agreement further constrains the flow of information within value chains. Companies subject to the rules may not demand reporting information from smaller entities beyond what is set out in the voluntary sustainability reporting standard for SMEs (VSME). Enterprises with fewer than 1,000 employees are explicitly permitted to decline requests that exceed that standard.

Collectively, these measures recalibrate the regulatory perimeter and materially reduce the number of entities subject to EU sustainability reporting and due diligence obligations.

Obligations Removed and Recalibrated

What Substantive Obligations Were Removed or Narrowed?

Beyond redefining applicability, the Omnibus package modifies the substance of corporate duties under the due diligence framework.

Most notably, lawmakers removed the requirement for companies to adopt climate transition plans aligned with global temperature goals. This deletion alters the directive’s approach to forward‑looking climate alignment and corporate transition planning.

The scope of due diligence has also been refined. Companies are required to focus primarily on direct business partners, unless they possess plausible information indicating adverse impacts further down the value chain. This adjustment reshapes the depth and breadth of supply chain assessments required under the directive.

In parallel, companies within scope are instructed to rely principally on reasonably available information rather than systematically soliciting data from smaller value chain partners. This provision further moderates the operational intensity of due diligence processes.

Liability, Penalties, and Timeline Adjustments

How Did Enforcement and Implementation Rules Change?

The final agreement introduces consequential changes to enforcement architecture and implementation timing.

The regulation’s EU‑wide liability regime has been eliminated. In addition, potential penalties under the CSDDD are now capped at a maximum of 3 percent of global revenues. These revisions redefine the legal exposure associated with non‑compliance.

The compliance deadline for companies covered by the CSDDD has also been extended. The revised framework requires adherence by July 2029, replacing earlier implementation timelines. The deferral alters the temporal dimension of compliance planning without removing the underlying obligations.

Together, these measures reshape both the enforcement parameters and the practical sequencing of regulatory implementation.

Conclusion

The Omnibus package approved by EU member states constitutes a comprehensive restructuring of the Union’s sustainability regulatory regime. The amendments raise eligibility thresholds, restrict information flows within value chains, remove the obligation to prepare climate transition plans, eliminate the EU‑wide liability regime, introduce a cap on penalties, and postpone compliance deadlines.

Although the CSRD and CSDDD remain in force, their operational reach and enforcement contours have been materially recalibrated. Companies operating within, or with material exposure to, the EU market must therefore reassess their regulatory posture in light of a framework that is narrower in scope yet still structurally significant as it proceeds toward formal entry into force.

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