Key points
- On 26 February 2025, the European Commission (EC) published the first ‘Omnibus’ package intended to simplify EU sustainability reporting rules related to the EU Green Deal.
- The proposals cover the Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy Regulation, and other related regulations.
What is the issue?
On 26 February 2025, the European Commission (EC) published the first of the ‘Omnibus' packages intended to simplify sustainability reporting requirements.
The package includes proposals related to the Corporate Sustainability Reporting Directive (CSRD) as well as proposed changes to the Corporate Sustainability Due Diligence Directive (CSDDD), the Carbon Border Adjustment Mechanism (CBAM), and regulations related to InvestEU and other EU investment programmes. The EC also issued a draft Delegated Act to propose changes to the EU Taxonomy Regulation (EU Taxonomy).
Proposals related to CSRD
The EU issued two proposals to update CSRD referred to as the ‘stop the clock’ and the ‘content’ proposals. The ‘stop the clock’ proposal is relatively short. It proposes to postpone ‘wave 2’ and ‘wave 3’ reporting by two years. This delay is intended to provide time for the adoption of the ‘content’ proposal. The ‘content’ proposal includes four primary areas of proposed changes, including the scope of the CSRD, value chain requirements, assurance requirements, and updates to the ESRS standards.
The broad changes included in the ‘content’ proposal are summarised in the following table:
Topic |
Current requirements |
Proposed changes |
|---|---|---|
Scope
|
Whether an entity is in scope and the timing of compliance depends on entity size and whether the entity is listed on an EU regulated market. All EU entities required to report in accordance with the CSRD are also required to report in accordance with the EU Taxonomy Regulation.
|
The determination of whether an entity is in scope will primarily depend on whether it has more than 1000 employees. Entities with up to 1000 employees could voluntarily report in accordance with the Voluntary Sustainability Reporting Standard for micro, small, and medium-sized enterprises (VSME). Requirements to report in accordance with the EU Taxonomy would be voluntary for some entities required to report in accordance with CSRD.
|
Value chain
|
Limit on what ESRS can require entities to request from their value chain partners.
|
Value chain cap would apply directly to reporting entities. Requests from entities with up to 1,000 employees would be limited to the requirements of the VSME.
|
Assurance
|
Limited assurance in the initial years of reporting, moving to reasonable assurance. EC to adopt an assurance standard by 2026.
|
Moving to reasonable assurance would be removed. EC to issue targeted assurance guidelines by 2026.
|
Standards
|
EC requirement to issue sector-based standards (approximately 40 sector standards are planned). European Sustainability Reporting Standards (ESRS) currently adopted and in effect for entities subject to reporting.
|
Requirement to issue sector standards would be removed. ESRS would be updated with an intent to reduce the reporting burden. Areas targeted for change in the proposal include:
|
Notably, there are some fundamental areas of reporting in accordance with ESRS that have not changed, including the requirement for entities to identify impacts, risks, and opportunities through a double materiality assessment.
Draft Delegated Act related to the EU Taxonomy Regulation
As part of the Omnibus simplification package, the EC has also issued a draft Delegated Act including proposed amendments to the EU Taxonomy. The changes are intended to make EU Taxonomy reporting simpler and therefore more cost-effective for entities. The proposals would reduce the data required and make some requirements more flexible. The draft Delegated Act proposes changes to the Taxonomy Disclosures Delegated Act, the Taxonomy Climate Delegated Act, and the Taxonomy Environmental Delegated Act.
What should companies affected by the proposed changes consider?
Wave 1: listed EU-entities currently required to report as of Financial Year 2024
Wave 2: large EU-entities currently required to report as of Financial Year 2025
Wave 3: small and medium sized listed EU-entities currently required to report as of Financial Year 2026
Wave 4: third country groups currently required to report as of Financial Year 2028
Stay informed: Familiarize yourself with the proposed changes. These would have most immediate impact on Swiss companies in scope of Wave 1 (reporting content), Wave 2 (threshold, timeline and reporting content), Wave 3 (timeline and reporting content), and Wave 4 (threshold and reporting content).
- Assess the impacts and possible scenarios: Consider the potential impacts of the proposed changes on your project/implementation plan of CSRD to start refining it and preparing scenarios, starting with:
- The impact on your legal scoping (especially proposed threshold changes) and possibly on your reporting strategy, taking into consideration the national law of EU Member States which have already transposed CSRD and related directives or regulations;
- The impact of the proposed delay of 2 years for CSRD Wave 2 and Wave 3 companies on your implementation plan/timeline; and
- The impact on your scope of datapoints to be disclosed (proposed updated ESRS to be published only 6 months after the entry into force of the new legislation).
Develop a strategy: Depending on the above impact and under consideration of different scenarios, (e.g. adoption of Omnibus in current or amended form), develop a strategic plan on which implementation actions to prioritize, considering diverse perspective (incl., compliance, risk, strategy, resources, stakeholder expectations, etc.)
Engage stakeholders: Engage with most relevant internal and external stakeholders to communicate your company's approach to sustainability and compliance with the proposed regulation.
Use the available time to further increase the maturity of your existing non-financial reporting governance, processes as well as controls and thus increase your readiness for the upcoming reporting and related limited assurance requirements in due time.
Please reach out to the PwC experts to discuss the implications of the proposed regulatory changes for your company.
What’s next?
All of the proposals released on 26 February 2025 are draft and subject to significant change through the adoption process.
With respect to the draft Delegated Act related to the EU Taxonomy, there is a current request for comment through a call for evidence to collect public feedback. The feedback period is open until 26 March 2025. The Omnibus proposals are not open for public feedback. Instead, they will go through a ‘co-legislative’ process and require approval from the European Parliament and the Council of the European Union. The draft Delegated Act related to the EU Taxonomy will follow the same process. The proposals are raising various issues of interpretation and application. We would expect these matters to be discussed during the negotiation process.
The timing for adoption of the proposals and the draft Delegated Act is uncertain. The ’stop the clock’ proposal includes a requirement for the Member States to transpose the Directive by 31 December 2025, although this will be subject to the timely approval by the European Parliament and the Council of the European Union. The ‘content’ proposal does not specify a date by which it needs to be transposed, although it includes a draft requirement such that the transposition would need to occur within 12 months of approval. In addition, the updated drafts of the ESRS would need to be issued within 6 months of approval of the ‘content’ proposal.
The EC has asked the European Council and the European Parliament to treat these proposals “with priority”, however the timing is uncertain. Until the proposals have been approved and transposed as discussed below, the current existing legislation (including the CSRD, CSDDD, and EU Taxonomy) based on local law continues to be in force.
Contact us
Partner, Finance Transformation Platform Leader and Sustainability Platform Leader, Zurich, PwC Switzerland
+41 58 792 25 37
Petra Schwick
Partner, Assurance, PwC Switzerland
Erik Steiger
