The EU wishes to boost its competitiveness and growth, encourage innovation and economic resilience and foster transparency and trust. One key strategy to achieve this is by removing excessive regulatory burdens.¹

The European Commission (EC) has a target to achieve 'at least 25% reduction in administrative burdens and at least 35% for SMEs' before the end of 2029. To help realise this ambition the EC is delivering a programme of Omnibus packages.²

The first and second Omnibus simplification packages (the Omnibus Package) were published on 26 February 2025 and include proposed amendments to the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), the Carbon Adjustment Mechanism (CBAM) and the InvestEu Regulation. A draft Taxonomy Delegated Act was also released alongside the Omnibus Package.

The Omnibus Package includes measures to simplify requirements, increase alignment, reduce the number of companies in scope and delay some reporting timelines.

¹ Q&A on simplification omnibus I and II
² ESG – Commission proposes changes to Taxonomy Regulation Level 2 | Simmons & Simmons

ACCA has already released several pieces of content on the Omnibus Package, including:

• ACCA’s opinions on the Omnibus Package, February 2025, supporting the aims of the Omnibus Package but recognising the need to ensure that it delivers its ambitions and maximises the interoperability with the IFRS Sustainability Disclosure Standards. 
• Expectations for the Omnibus Package, February 2025, including insights on CSRD, Voluntary Reporting Standard for SMEs (VSME) and examples of reports already published under ESRS.
• An overview of the sustainability reporting changes, April 2025, including details of the proposals under the Omnibus Packages and insights into the various pros and cons.

ACCA is monitoring the developments of the Omnibus Package and, if appropriate, will submit consultation responses. ACCA also regularly engages with Accountancy Europe, EFAA and smeunited on their positions and may submit collaborative consultation responses. 

The key proposed changes, outlined in the Omnibus Package published on 26 February, are:

CSRD (corporate reporting on sustainability)

• Postpone the first reporting dates by two years for large companies and non-listed SMEs that have not yet started reporting ('stop-the-clock').
• Increase the thresholds for companies that are in-scope, reducing the number of companies that need to report.
• Limit the reporting requests for companies not in-scope by adopting a proportionate standard, for voluntary use, based on the VSME. 
• Abolish the requirement for a separate reporting standard for listed SMEs, small banks and captive insurers (LSME).
• Delete the possibility of moving to a reasonable assurance requirement.
• Delete the requirement for sector-specific standards.
• Simplify the ESRS.

Further details can be found in the Factsheet produced by Accountancy Europe. 

Accountancy Europe is a Brussels-based organisation that represents 45 professional organisations from 35 countries across accountancy, auditing and advisory services. ACCA is an Accountancy Europe member and contributes to its policy work, including in relation to the Omnibus Package.

CSDDD (corporate due diligence requirements on the human rights and environmental impacts in supply chains)

• Postpone the application of requirements for the first wave of companies until July 2028 ('stop-the-clock').
• Advance the timetable for guidelines from the EC.
• Narrow the definition of stakeholder, excludes groups such as consumers, civil society organizations and others.
• Limit value chain scope to a company’s own operations, its subsidiaries and its direct business partners.
• Restrict information requests from SMEs.  
• Remove duty to terminate business relationships when adverse impacts are severe and other measures have been exhausted. 
• Decrease frequency of due diligence assessments from one to five years. 
• Remove obligation to ‘put into effect’ a transition plan and replace with an obligation to 'adopt' a transition plan with implementing actions, aligned with CSRD.

Further details can be found in the Factsheet produced by Accountancy Europe.

Insights from ACCA on CSDDD and its benefits can be found in the article Sustainability due diligence starts now, published in the August 2024 issue of AB.

CBAM³ (pricing mechanism on EU imports based on emissions)

• Exempt importers of small quantities of CBAM goods.
• Simplify the authorization of declarants, the calculation of emissions, and the management of financial liability.
• Strengthen the anti-abuse provisions and develop a joint anti-circumvention strategy.

Further details can be found in the EU CBAM Proposal: Key Changes and Implications article by Anthesis.

InvestEU⁴ (programme mobilising private and public funds for sustainable investments)

• Increase EU guarantee.
• Simplify the reporting requirements.
• Enhance access for SMEs.
• Integrate with legacy programs.

EU Taxonomy⁵ (classification system for defining sustainable activities)

• Limit obligations to largest companies, with possibility for others to report voluntarily. 
• Those in-scope and voluntary reporters are required to disclose turnover and CapEx Key Performance Indicators  (KPIs) and may choose to disclose their OpEx KPI.
• Report on activities that might be partially taxonomy aligned.
• Simplify reporting templates, reduce data points.
• Exempt from taxonomy assessments if below certain turnover, capital expenditure or total assets thresholds. 
• Simplify the most complex 'Do No Significant Harm' criteria for pollution prevention and controls related to the use and presence of chemicals.

Further details can be found in the ESG – Commission proposes changes to Taxonomy Regulation Level 2 article by simmons+simmons. 

³ BSR_Omnibus_FactSheet_Mar2025.pdf
⁴ Simplifying investment: Council agrees its position on the InvestEU regulation to boost the EU's competitiveness - Consilium
⁵ How to navigate the EU Omnibus Simplification Package

The various elements of the Omnibus Package are progressing through negotiation and approval at different rates, their status, as of 16 July 2025, is summarised in the table below. Given the dynamic nature of this legislative process, developments may occur quickly and the proposals are subject to change. 

⁶ Newsflash | “Stop the Clock” Directive: Luxembourg implementation of CSRD
⁷ EU Omnibus Update – Recent Developments relating to CSRD and CSDDD – “quick fix” and more
⁸ Extended Duration of EFRAG’s Public Consultation on ESRS Simplification | EFRAG
⁹ Extended Duration of EFRAG’s Public Consultation on ESRS Simplification | EFRAG
¹⁰ Simplification: Council agrees position on sustainability reporting and due diligence requirements to boost EU competitiveness - Consilium
¹¹ EU Omnibus explained
¹² Commission adopts 'quick fix' for companies already conducting corporate sustainability reporting - European Commission
¹³ QANDA_25_615_EN.pdf
¹⁴ Impacts for US Companies of the Proposed EU Omnibus Package
¹⁵ Simplifying EU’s carbon border adjustment mechanism: Council agrees negotiating position - Consilium
¹⁶ European Parliament approves simplifications to CBAM procedures suggested by European Commission
¹⁷ Carbon border adjustment mechanism (CBAM): Council and Parliament strike a deal on its simplification - Consilium
¹⁸ Q&A on simplification omnibus I and II
¹⁹ Simplifying investment: Council agrees its position on the InvestEU regulation to boost the EU's competitiveness - Consilium
²⁰ ESG – Commission proposes changes to Taxonomy Regulation Level 2 | Simmons & Simmons
²¹ Commission to cut EU taxonomy red tape for companies - European Commission
²² EU Commission faces complaint over easing of sustainability rules | Reuters
²³ Watchdog demands EU explain speed of proposals to cut green rules | Reuters

The potential benefits include:

1. Reduce administrative burden – some companies are no longer in scope. For those that remain in scope, the requirements are being simplified and streamlined and the number of datapoints reduced. This should relieve the compliance burden and alleviate the strain on resources.
2. More time to prepare – some reporting deadlines have been delayed, giving companies more time to prepare. This should help to ease short-term pressure and free capacity to build reporting systems and improve data quality in anticipation of future reporting.
3. Protect those not in-scope from excessive information requests – the amount of information that can be requested from companies out of scope should be capped and guided by a voluntary standard, based on the VSME. This prevents those out of scope being inundated with extensive information requests in multiple different formats.
4. Focus on material activities – thresholds should help companies to concentrate and focus efforts on the most significant areas.
5. Consistent and comparable reports – simplified and streamlined requirements and clarity should enhance consistency and comparability of reports.
6. Increase capacity for innovation – reducing the reporting complexity and compliance burden should help enable internal capacity to foster innovation in sustainable practices. 
7. Increase availability of funding from InvestEU – simplified administrative requirements should increase the accessibility of funding and the increased guarantee should mean there is more funding available.

The potential risks include:

1. Delay transition towards sustainable business models – some companies may view the reduction in scope and delay in timing as an excuse to pause sustainable action. The removal of the requirement to ‘put into effect’ a transition plan reduces the accountability and legal force for executing a plan. This could delay the net-zero, nature-positive and just transition.
2. Reduce transparency on poor value chain practices – it may be more challenging to identify and address violations which could allow continued unethical practices and environmental harm in the value chain.
3. Limit diversity of perspectives – the narrower definition of stakeholder could reduce the diversity of perspectives gathered when completing due diligence. 
4. Delay flow of capital to sustainable businesses⁴  - if disclosure is reduced or delayed investors could have insufficient information to make capital allocation decisions based on progress on sustainability.
5. Lack of appropriate guidance for sectors - in the absence of sector-specific guidance reporting may be less meaningful and companies may struggle to interpret and apply general standards to their business.
6. Uncertainty over access to finance – a delay in companies reporting on their sustainability credentials prevent them from accessing certain sources of sustainable finance.  

⁴ How to navigate the EU Omnibus Simplification Package

Some key benefits, specifically for SMEs, are:

1. Limits on sustainability information requests from large companies - the information that large companies can request from those out of scope is limited by the content of a voluntary standard.²⁵ This reduces the administrative load for SMEs (as there is a cap on what large companies can request) and increases efficiencies as there is one standardized framework that everyone is encouraged to use.
2. Removal of EU-listed SMEs from the scope of CSRD - EU-listed SMEs were previously required to report using the LSME, this has been removed under the Omnibus Package proposals. EU-listed SMEs may choose to voluntary opt-in and report. This liberates EU-listed SMEs from reporting requirements while still allowing them to engage with voluntary sustainability reporting if they wish to. 
3. Delay in reporting obligations - the delayed reporting of those in-scope for CSRD, who have not yet started reporting, may trickle down to SMEs providing more time to prepare for such information requests.
4. Reduction in the frequency of due diligence assessments and reduction in scope for CSDDD – the shift to monitoring every five years means that SMEs may face fewer requests and less frequent engagement. Additionally, by limiting due diligence obligations to direct business partners or taking a risk-based approach, SMEs may be  excluded from these requirements altogether, reducing their overall compliance burden.
5. Exemption from CBAM reporting obligations - most SMEs that import only small amounts of carbon-intensive goods will likely fall below the reporting threshold, meaning they can avoid the costly burden of collecting emissions data, calculating carbon output, and purchasing CBAM certificates.
6. Easier access to EU-funding - InvestEU and other EU-backed financial instruments will have simplified reporting requirements and less bureaucracy, which may make it easier for SMEs to access EU funding and guarantees.

²⁵ Unless additional information is needed to carry out mapping and the information cannot be obtained in any other reasonable way.

Although some of the Omnibus Package proposals are still pending, taking action now to prepare is important - whether the company is in or out of scope or inside or outside the EU. In-scope companies must meet requirements, possibly with extended deadlines, while out-of-scope companies will likely face information requests from partners. Proactive preparation helps maintain competitiveness, prevent supply chain issues, and meet stakeholder expectations. To prepare, it may be helpful to:

EY’s guidance on How to navigate the EU Omnibus Simplification Package provides useful insights on how you can prepare.