On February 26, 2025, the European Commission presented the first “Omnibus” package, a legislative proposal aimed at simplifying and streamlining the regulatory framework for sustainability reporting. This initiative seeks to reduce administrative burdens for businesses, particularly SMEs, and promote a more proportionate approach to ESG data collection and disclosure.
The goal of the Omnibus is clear: simplify without dismantling. It aims to make sustainability reporting more accessible, manageable, and aligned with the operational realities of European businesses without compromising transparency or accountability.
On April 1, 2025, the European Parliament approved an urgent procedure to fast-track the adoption of the Omnibus package. This vote marked a key step toward the so-called “Stop-the-clock Directive,” which includes:
A two-year postponement in the application of the CSRD (Corporate Sustainability Reporting Directive) for companies in wave 2 and wave 3 (i.e., companies scheduled to start reporting next year and non-EU companies).
A one-year postponement in the application of the CSDDD (Corporate Sustainability Due Diligence Directive) for large companies.
Official confirmation came on April 3, 2025, with strong majority support in Parliament. This move signaled the EU’s commitment to providing businesses with adequate time to adapt to the new regulations and build robust ESG reporting processes.
The package unfolds in three key phases:
Temporarily halts the reporting obligation for a significant portion of European companies by postponing the CSRD’s implementation for wave 2 and wave 3 entities. This suspension creates a window of opportunity for companies to prepare methodically.
🌊 Wave 1 – In force since 2024
Public-interest entities with more than 1,000 employees (listed companies, banks, insurers). These companies are already publishing reports under the ESRS (European Sustainability Reporting Standards).
🌊 Wave 2 – Postponed to 2028
Large non-listed companies meeting at least two of the following criteria:
📆 First report due in 2028 (referring to fiscal year 2027).
🌊 Wave 3 – Postponed to 2029
Listed SMEs meeting at least two of the following criteria:
📆 First report due in 2029 (referring to fiscal year 2028).
The Commission proposes scaling back requirements by:
The ESRS are being realigned with other European regulations (e.g., CBAM, CSDDD) to avoid overlaps and conflicts. A new VSME framework is introduced for non-listed SMEs, offering voluntary, less burdensome standards that support gradual adoption without sacrificing transparency.
Despite the regulatory slowdown, many businesses are not hitting pause. Quite the opposite: they are using this window to strengthen processes, improve data collection, enhance sustainability teams, and engage more effectively with stakeholders.
Our experience with over 150 companies confirms that ESG reporting is not just about compliance-it is a strategic tool for risk management and value creation.
This is not a time to rush, but to build a solid new strategic framework. The recommended approach is based on three levers:
Agnostic Data Collection - Build a dataset aligned with the ESRS and compatible with the VSME framework-ensuring flexibility and progressive evolution.
Reasoned Materiality - Focus only on what truly matters: rigorously apply the double materiality principle, justifying any exclusions (topics, indicators, datapoints) with clear and transparent criteria. Avoid overstating immaterial topics; instead, focus on impacts across the value chain.
Ongoing Preparation No Rush, No Pause - The delay is a regulatory pause, not an operational one. Now is the right time to finalize ESG governance, engage suppliers, train middle management, and define the reporting perimeter.
The Omnibus package, particularly the swift approval by Parliament, marks a new phase: less immediate regulatory pressure, more space for quality and strategy.
Forward-looking companies are already investing in this transformation. Sustainability is not just an obligation, it’s a differentiator, a driver of attractiveness, and a source of resilience.
As Mario Draghi reminded us:
“We must fully implement the reduction of obligations for SMEs.”
But to implement doesn’t mean to slow downit means to do better, with less.