CSRD in 2026: Current status for companies following Omnibus I

The Corporate Sustainability Reporting Directive, or CSRD, has not been abolished. However, it has been significantly streamlined by the Omnibus I package. The new focus is on much larger companies, reduced reporting obligations and clearer boundaries for smaller companies in the value chain.

The key point first: at EU level, the Omnibus I Directive has been formally adopted. The Council of the European Union gave its final approval to the simplification measures on February 24, 2026; since then, the European Commission has listed the first Omnibus package as an adopted legislative initiative.

For companies, this means that CSRD reporting remains a strategic sustainability reporting topic. However, many companies that would have been subject to reporting obligations under the original CSRD are expected to fall outside the mandatory scope under the revised EU framework.
 

Background: Why the CSRD reform was introduced

The CSRD was adopted in 2022 to replace the previous Non-Financial Reporting Directive and make sustainability information more reliable, comparable and auditable. The first companies had to apply the new requirements for the 2024 financial year, with reports published in 2025.

Criticism of the original CSRD came from various stakeholders, with business associations, SME organizations and legal experts among the most vocal critics of overregulation. The main concerns were that the requirements and administrative burden were too extensive, ESG data quality varied significantly across companies, the indirect pressure on smaller suppliers was too high and the principle of double materiality was difficult to implement in practice. Many companies would not only have had to collect new ESG KPIs, but also establish new governance structures, processes, controls and audit trails. Critics also argued that EU companies could be placed at a competitive disadvantage globally, as non-European competitors are not subject to the same strict sustainability reporting requirements.

With the Omnibus I package, the EU responded to this criticism. The objective is to reduce bureaucracy, improve legal clarity and focus mandatory sustainability reporting more strongly on companies with the greatest economic and environmental impact.
 

Key CSRD changes under Omnibus I

Under the current EU framework, the CSRD will in future only apply to companies with more than 1,000 employees and more than EUR 450 million in net turnover. Higher thresholds will also apply to non-EU companies, including EUR 450 million in EU turnover as well as an EU subsidiary or EU branch with more than EUR 200 million in turnover.

The timeline has also been adjusted. The so-called “Stop-the-clock” Directive postponed the application of CSRD requirements for second- and third-wave companies by two years. This affects companies that were originally expected to report for the first time for the 2025 or 2026 financial years.

At the same time, the European Sustainability Reporting Standards are being revised. In December 2025, EFRAG submitted draft simplified ESRS to the European Commission. These drafts include, among other things, a 61 percent reduction in mandatory data points and the removal of voluntary disclosures.

The following overview shows the key changes from the original CSRD to the current version after Omnibus I:

What companies should do now

1. Reassess the CSRD scope

The most important step is a robust CSRD scope analysis. The decisive factor is not only the individual legal entity, but also the group structure. Companies should assess whether they exceed the new thresholds at entity or group level and whether transitional rules apply. This scope assessment should not be treated as a purely legal exercise. Companies also need to consider when they must become operationally ready for sustainability reporting again. For the next group of companies subject to reporting obligations, financial year 2027 is already approaching.

2. Do not pause sustainability reporting entirely

Companies that fall outside the mandatory scope under Omnibus I are not automatically outside the need for ESG transparency. Banks, investors, customers and tenders will continue to request sustainability information. Medium-sized companies in particular should therefore decide whether lean voluntary reporting in line with the VSME standard makes sense.

3. Professionalize the ESG data foundation

The CSRD may have been simplified, but it remains a data-driven reporting framework. Companies need clear responsibilities, consistent KPI definitions, reliable sources and documented controls. Excel-based standalone solutions quickly reach their limits in this context.

4. Update the double materiality assessment

Many companies have already started their double materiality assessment. This work remains valuable. However, results, assessment logic and stakeholder assumptions should be aligned with the new legal framework and the expected simplified ESRS.

5. Consider auditability from the beginning

Sustainability reports are not only prepared, they are also audited. Companies should therefore clarify at an early stage which evidence, approvals, data histories and control mechanisms are required. Those who only consider the auditor’s perspective at the end risk avoidable rework.
 

CSRD 2026 in Germany: National implementation still pending

In Germany, CSRD implementation remains a special case. The original transposition deadline already expired in 2024. As the implementation act had still not been adopted by the end of 2025, the old legal framework, CSR-RUG, formally remains in place. In 2026, the German legislator is continuing to work on national implementation, now taking into account the revised EU requirements under Omnibus I.

On April 13, 2026, a public hearing of the Legal Affairs Committee took place on the government draft of the CSRD Implementation Act. The discussion focused, among other things, on opening up the assurance market, relief measures for companies in the value chain and the question of whether the rules should apply retroactively.
 

Conclusion: Fewer obligations, but no reason to stand still

Omnibus I has significantly changed the CSRD. The number of companies directly subject to mandatory reporting is becoming smaller, the timeline is shifting and the ESRS are expected to be substantially simplified. For many companies, this means relief. For companies that remain in scope, however, it is not a reason to postpone action.

Even a 61 percent reduction in ESRS data points does not automatically mean 61 percent less effort. The core challenges remain: companies must identify relevant ESG data, clarify responsibilities, consolidate data sources, document controls and establish audit-ready processes. Double materiality, data quality and the traceability of disclosures remain decisive.

If you need to report again from financial year 2027, you should assess by 2026 at the latest whether your existing processes and systems are sufficient. CSRD reporting is not just a reporting project; it is a data- and process-driven management topic. Companies that professionalize their ESG data foundation and evaluate suitable software solutions now can avoid time pressure, rework and unnecessary audit risks later.