Sustainability reporting in the EU is undergoing a major transformation. Frameworks like the Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy Regulation are pushing companies to disclose their environmental, social, and governance (ESG) impacts more thoroughly than ever before. These regulations are designed to improve transparency and accountability, but for many businesses, they’ve become synonymous with rising costs, compliance headaches, and a fear of losing ground in an increasingly competitive global market.
To help ease the burden, the European Commission announced the EU Omnibus Simplification Package in February 2025. The aim? Streamline sustainability reporting by aligning and consolidating EU frameworks, cutting through regulatory complexity, and bringing reporting closer to international standards like those of the International Sustainability Standards Board (ISSB). If approved, the Omnibus Package could make ESG reporting less resource-intensive and more strategic, enabling companies to focus on what really matters.
What’s changing under the Omnibus Package?
Key updates designed to ease compliance include:
- Narrowed CSRD scope: Only companies with 1,000+ employees and a turnover of €50 million or a €25 million balance sheet must report.
- Two-year grace period: Delays the enforcement for companies not yet reporting under CSRD.
- Simplified due diligence: CSDDD assessments will now concentrate on Tier 1 and high-risk suppliers.
- Streamlined European Sustainability Reporting Standards (ESRS): Fewer mandatory disclosures, with a focus on the most material issues for a company’s operations.
- Carbon Border Adjustment Mechanism (CBAM) flexibility: Eases reporting for exporters and SMEs.
- Voluntary SME Standards (VSME): A non-binding option for smaller businesses to report ESG performance.
Is this really a simplification?
While the term simplification may sound promising, the reality is more nuanced. Reducing the scope or consolidating frameworks doesn’t necessarily make compliance easier for everyone.
For large multinationals, aligning with shifting rules across jurisdictions can still be a complex, resource-intensive task. SMEs may be exempt from some regulations, but pressure from investors, clients, and supply chain partners will likely push them to disclose ESG data anyway. Voluntary frameworks may require just as much strategic clarity as mandatory ones, especially if businesses want to maintain credibility in the eyes of the market. In short, less regulation doesn’t always mean less work.
How can your business prepare?
Even though the UK has left the EU, EU regulations still affect UK-based companies with operations, suppliers, or customers across the Channel. Future UK sustainability frameworks may also mirror EU regulations, making changes in the Omnibus Package very relevant for UK businesses.
To make the most of the Omnibus Package, UK businesses should:
- Stay ahead of the curve by keeping an eye on legislative changes and adapting your reporting strategies accordingly.
- Focus on what truly matters, reporting on the sustainability issues that make the biggest impact for both your business and stakeholders.
- Building trust is key, so engage your investors, customers, and partners regularly to share your progress and keep them in the loop.
- Take advantage of the extra time to build stronger internal sustainability systems that will set you up for long-term success.
- And most importantly, don’t overlook the power of voluntary reporting; it could give you the competitive edge you need to stand out as a leader in sustainability.
Making compliance work for you
At the end of the day, this isn’t just about ticking fewer boxes. It’s about reporting in a way that works for your business.
The EU Omnibus Package is a reminder that sustainability reporting doesn’t have to be overwhelming. Done right, it can help you focus on the things that matter most, strengthen relationships with investors and customers, and make your business more resilient in the long run.
If you’re unsure how these changes affect you or where to begin, the Temple team is here to support you. We can help you interpret the new requirements, identify what’s material to your business, align with international standards, and turn compliance from a perceived admin burden into a real business opportunity.