Eu Omnibus I directive
Sweeping Simplification of CSRD and CSDDD Enters into Force
The EU has drawn a new line on reporting obligations. The Omnibus I Directive officially enters into force on March 18, 2026, 20 days after its publication in the Official Journal.
On February 26, 2026, Directive (EU) 2026/470 was published in the Official Journal of the European Union. It reforms both the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) as part of the Omnibus I package. A long-awaited response to years of corporate calls for reduced bureaucracy.
CSRD: Large Corporations Only
The most immediate impact concerns the scope of the CSRD. Reporting thresholds have been significantly raised. Going forward, only EU companies that cumulatively meet both of the following criteria are subject to mandatory reporting:
- More than 1000 employees on an annual average
- Net turnover exceeding €450 million
This effectively removes most companies originally in scope. Listed SMEs and mid-sized groups, many of which had already invested heavily in building reporting infrastructure, are now fully exempt. For companies that remain subject to reporting obligations, the first reporting period covers fiscal year 2027, with reports due in 2028.
Value Chain: Protection for Small Suppliers
Large companies had been placing extensive data requests on their smaller suppliers, creating a significant administrative burden. The new directive draws a clear line. Companies in the value chain with no more than 1,000 employees now have the right to decline information requests that go beyond voluntary reporting standards.
This is complemented by targeted exemptions: companies may omit or estimate certain sustainability data. For instance, where supply chain data is unavailable or where disclosure would compromise legitimate business interests.
CSDDD: Higher Thresholds, Extended Deadlines
The relief is even more pronounced for supply chain due diligence requirements. The CSDDD now applies only to corporations with:
- More than 5000 employees
- Global net turnover exceeding €1.5 billion
Numerous companies that were previously in scope no longer qualify. Additionally, the application date has been pushed back. The new rules, including the first full reporting period, apply from July 26, 2029.
Penalties for non-compliance are now capped at a maximum of three percent of global net turnover and will be enforced at the national level.
Risk-Based Prioritization Instead of Full Mapping
Beyond the higher thresholds, the methodological requirements have also fundamentally changed. Rather than comprehensive mapping of the entire supply chain, a risk-based prioritization approach now suffices. Companies are only required to conduct in-depth reviews of those areas where adverse impacts are most likely and most severe. This substantially reduces operational workload, but it does require a system capable of structured risk capture, assessment, and audit-proof documentation.
Timeline and Next Steps
The Omnibus I Directive enters into force on March 18, 2026. Member States have until March 19, 2027, to transpose the CSRD amendments into national law. For CSDDD provisions, the transposition deadline is extended to July 26, 2028.
The European Commission must revise the European Sustainability Reporting Standards (ESRS) by September 18, 2026. For companies still subject to reporting obligations, this creates a transition period pending the finalization of the updated standards.
What This Means for Compliance Officers
For large companies that remain in scope: the obligation stands. Implementation of the ESRS and the expansion of internal reporting structures should move forward without delay.
For all other companies: the directive creates an opportunity to reorient sustainability strategies without immediate regulatory pressure. Organizations that choose to report voluntarily can draw on the forthcoming Voluntary Sustainability Standard for SMEs (VSME), currently being developed by the European Commission as a low-threshold framework for smaller businesses.
The Omnibus I Directive narrows the circle of affected companies, but raises the bar for those that remain: risk-based prioritization, structured documentation, audit-proof processes. Our CSDDD Compliance System supports you at exactly these points.