On February 26, 2025, the European Commission presented a legislative proposal as part of the so-called “Omnibus” package, aimed at easing the non-financial reporting obligations imposed on European companies under the Corporate Sustainability Reporting Directive (CSRD).

Adopted in 2022, the CSRD requires companies to disclose detailed information on their environmental, social, and governance (ESG) performance. While the directive marked an important step toward a more responsible economy, it has also drawn criticism due to the heavy administrative burden it places on small and medium-sized enterprises (SMEs), which often lack the resources to comply effectively.

The reform proposed by the Commission seeks to refocus these obligations on the largest companies—those with the most significant environmental and social impact. In concrete terms, the Commission suggests:

• limiting full reporting requirements to large companies that exceed certain thresholds in terms of employees, turnover, or balance sheet total;
• fully exempting non-listed SMEs from these obligations;
• offering a simplified reporting framework for listed SMEs;
• reducing and streamlining the required sustainability indicators to lighten the content of reports.

The proposal also includes a postponement of the initial compliance deadlines for certain categories of companies, giving them more time to adapt to the directive’s requirements.

This adjustment aims to safeguard the competitiveness of European businesses in a challenging economic context, while still upholding the environmental and social ambitions of the European Green Deal. It also responds to ongoing calls from the business community for more proportionate and pragmatic regulation.

The proposal will now be reviewed by the European Parliament and the Council of the European Union. If adopted, the new rules could come into force as early as 2026.