Simplifying Sustainability Reporting: The EU’s Omnibus Directive Explained

As sustainability regulations continue to evolve across Europe, businesses are being asked to do more and now, in some cases, a little less. The Full Omnibus Directive, proposed by the Council of the European Union, aims to streamline key ESG frameworks such as the Corporate Sustainability Reporting Directive (CSRD), EU Taxonomy, and the Corporate Sustainability Due Diligence Directive (CSDDD) all while safeguarding the goals of the European Green Deal.

This marks a critical moment for sustainability, climate communication, and corporate transparency. At ReFlow, we’re breaking down what this means for you.

The Directive at a Glance

The Full Omnibus Directive was introduced to address widespread concerns about overlapping, complex, and burdensome sustainability requirements. While reaffirming Europe’s commitment to climate goals, the Directive proposes several structural simplifications:

Key Changes in the Omnibus Directive

1. Higher Reporting Threshold (CSRD)

• Only companies with 1,000+ employees and meeting size thresholds must report.
• SMEs and listed mid-caps are largely exempted.
• This aligns CSRD more closely with the scope of the CSDDD​.

2. Delayed Reporting Obligations

• Wave 2 and Wave 3 companies under CSRD now report in 2028 and 2029, not 2026/2027.
• Due diligence under CSDDD is postponed to July 2028 for the largest companies​.

3. Reduced Value Chain Reporting Burden

• Companies are not required to request data from value chain partners with fewer than 1,000 employees.
• You may only report what is commonly shared or standard in the industry​.

4. Voluntary Sustainability Reporting Standards

• Smaller firms may choose to disclose ESG performance under voluntary reporting standards being developed by the EU.
• These are designed to be proportionate and flexible, easing participation for lower-capacity companies​.

5. Optional EU Taxonomy Reporting for Mid-sized Groups

• Companies with turnover under €450M may voluntarily report partial alignment with the EU Taxonomy, giving them a legal path to promote green claims while avoiding full compliance burdens​.

6. Standardized Digital Reporting

• Mandatory reporting will be marked up in a single electronic format under new digital standards, allowing structured, EU-wide data access and comparisons​.

Why This Matters

The Directive gives relief to many, but also increases the need for credible, digital-ready, lifecycle-based sustainability data. Green claims and taxonomy-aligned activities, even if voluntary, will now be held to stricter assurance and standards.

What Businesses Should Do Now

✅ 1. Don’t Hit Pause
Even with delays, you still need to prepare your data infrastructure, reporting procedures, and supplier engagement practices.

✅ 2. Map Your Reporting Scope
Determine if you fall above the 1,000-employee threshold or into voluntary/optional areas (e.g., taxonomy reporting).

✅ 3. Focus on Lifecycle-Backed Data
Use science-based carbon footprinting, LCA models, and supplier traceability to prepare for limited assurance and investor scrutiny.

✅ 4. Track Policy Updates
The Directive is not yet final, but it's moving quickly. Stay on top of how the European Parliament and Member States respond.

How ReFlow Supports Omnibus-Ready ESG

At ReFlow, we enable companies to meet evolving EU regulations by offering:

• LCA-driven Product Carbon Footprints
• Supplier data collection aligned with Tier 1 (direct) guidance
• Support for EU Taxonomy mapping and voluntary disclosures
• Digital tagging and reporting infrastructure for CSRD & CSDDD

Frequently Asked Questions (FAQs)

What is the Omnibus Directive?

A legislative proposal by the Council of the EU to simplify and clarify existing sustainability laws, especially the CSRD, EU Taxonomy, and CSDDD.

Will my company still need to report under CSRD?

Only if you have 1,000+ employees and meet other size thresholds. If you're below that, reporting becomes voluntary.

Can I still report on green activities if I'm exempt?

Yes - through voluntary reporting standards and optional taxonomy alignment. But claims must still follow harmonized data and structure.

When will these changes take effect?

If adopted, the new thresholds and delays would start affecting reporting for FY 2027 and beyond, with implementation into national law by 2026.

Will this undo previous ESG investments?

No - the EU emphasizes that the Directive will not revoke prior laws, but rather reduce duplication and clarify expectations.

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