EU Omnibus Initiative: How Omnibus I Will Affect Businesses
Omnibus I fundamentally changes the European framework for sustainability reporting and due diligence obligations. For companies, the thresholds are being raised and certain requirements are being simplified. This overview shows which rules are already in effect, what Germany still needs to implement, and which steps make sense to take now.
The European Union’s Omnibus Initiative is intended to simplify and better harmonize reporting requirements. The first package, Omnibus I, primarily concerns the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy.
The political decision-making process regarding the key changes has been completed: Directive (EU) 2026/470 was published in the Official Journal of the European Union on February 26, 2026, and entered into force on March 18, 2026. It amends the CSRD and the CSDDD, but does not automatically apply to these areas in the same way as a regulation. Member states must first transpose the requirements into national law. For companies in Germany, it is therefore crucial to distinguish between the adopted EU target legislation and the German law currently in force.
What is the Omnibus Initiative?
Through an omnibus legislative act, the EU amends several existing sets of regulations in a single legislative process. The term “omnibus initiative” does not refer to a single law, but rather to a series of simplification packages. This article discusses Omnibus I, which addresses sustainability regulations.
The package has three main objectives:
- to include fewer companies directly under the CSRD and CSDDD,
- To reduce reporting obligations and data requirements,
- To limit overlaps between sustainability frameworks.
Nevertheless, the CSRD and the CSDDD remain separate sets of regulations. They were amended by the same legislative act but were not merged into a single regulation.
Omnibus I: What are the current regulations (as of September 2026)?
The overview shows that there is no uniform effective date. The legal act, national implementation, and reporting year must each be considered separately.
What changes does Omnibus I make to the CSRD?
The CSRD requires certain companies to report on sustainability. Omnibus I significantly narrows its future scope.
New CSRD Thresholds
Under Directive (EU) 2026/470, only large companies and parent companies of large groups that exceed both thresholds are generally required to file reports:
- more than 1,000 employees and
- More than 450 million euros in net revenue.
Separate requirements apply to companies from third countries. The exact impact also depends on the corporate structure, place of incorporation, fiscal year, and national implementation. Therefore, a blanket statement based solely on the number of employees is not sufficient.
Companies included in the first wave of CSRD reporting that would no longer be covered under the new EU scope of application may be exempted from the reporting requirement for the fiscal years 2025 and 2026. Whether and how Germany implements this transitional provision depends on the national implementing legislation. Therefore, one should not assume that an automatic right to exemption exists.
What are the rules in Germany?
Germany must transpose the CSRD amendments set forth in Directive (EU) 2026/470 into national law by March 19, 2027. According to the official documentation reviewed as of the time of this writing, the German law implementing the CSRD had not yet been promulgated as of September 2026.
This means that the new EU thresholds cannot yet be equated without further consideration with German accounting law, which is directly applicable. Companies should assess their current reporting obligations separately based on the applicable German regulations and their anticipated future impact under the EU’s target legislation.
Revised ESRS, Voluntary Standard, and Value Chain Cap
The European Sustainability Reporting Standards (ESRS) specify the sustainability information that companies subject to the CSRD must report. The European Commission adopted revised ESRS on July 3, 2026. According to the Commission, the number of mandatory data points is expected to decrease by more than 60 percent; overall, the scope of the data points is expected to be reduced by more than 70 percent.
Important for disclosure practices: As of September 2026, the revised ESRS had not yet been published in the Official Journal of the European Union. They are therefore not yet in effect. The delegated act adopted by the Commission provides for mandatory application for fiscal years beginning on or after January 1, 2027; voluntary early application for the 2026 fiscal year is also permitted. These effective dates will not become legally binding until the delegated act is published and enters into force.
At the same time, the Commission adopted a delegated act on a voluntary sustainability reporting standard. It is aimed at companies with up to 1,000 employees and is intended to establish a uniform format for voluntary disclosures.
The Amending Directive already introduces a mechanism under EU law known as the “value chain cap.” It generally applies to companies in the value chain with up to 1,000 employees and is intended to limit the sustainability information that companies subject to the CSRD may require from them. However, as of September 2026, the delegated act containing the voluntary reporting standard that specifies the cap had not yet been published in the Official Journal and was therefore not yet applicable. German companies must also take into account the national implementation of the directive. Until the new standard becomes applicable, the existing VSME from Recommendation (EU) 2025/1710 can serve as voluntary guidance.
What changes does Omnibus I make to the CSDDD?
The CSDDD governs human rights and environmental due diligence obligations. Omnibus I raises the thresholds here as well and modifies key obligations.
In the future, the CSDDD will generally apply to EU companies that exceed both thresholds:
- more than 5,000 employees and
- More than 1.5 billion euros in global net revenue.
Separate revenue-based requirements apply to companies from third countries.
The Most Important CSDDD Changes
- Risk-Based Approach: Due diligence obligations remain tied to the chain of activities. Companies may prioritize their assessments based on the severity and likelihood of potential adverse impacts. There is no blanket restriction to direct business partners.
- Prioritize Direct Business Partners: When risk levels are comparable, companies may, under certain conditions, give priority to direct business partners. However, they must not ignore indications of risk involving indirect partners.
- Review Frequency: The regular assessment must generally be conducted at least once every five years. If there are relevant changes or specific indications, an earlier update is required.
- Business Relationships: There is no general obligation to terminate business relationships. However, companies must continue to evaluate risk-based preventive and corrective measures. A temporary suspension may still be required under certain legal conditions.
- Climate Transition Plan: The independent obligation to adopt and implement a climate transition plan in accordance with the CSDDD is no longer in effect.
- Liability and Sanctions: The uniform liability regime under EU law has been repealed. National liability regimes remain applicable. The maximum amount of turnover-based fines is capped at three percent of global net turnover.
In principle, Member States must transpose the amended CSDDD by July 26, 2028. Companies are to apply the new requirements starting in July 2029. The transposition deadline and the effective date are therefore not the same.
Consider the CSDDD and the German Supply Chain Act separately
The amendment to the CSDDD does not automatically repeal the German Supply Chain Due Diligence Act (LkSG). Until the German legislature effectively amends or replaces the LkSG, the obligations under the LkSG must be assessed separately. Companies should therefore not assume—based solely on the future scope of the CSDDD—that existing German obligations no longer apply.
What simplifications apply under the EU taxonomy?
The EU Taxonomy classifies environmentally sustainable economic activities. Specific simplifications are already in effect under Delegated Regulation (EU) 2026/73.
The key changes include:
- a materiality threshold of 10 percent, below which certain immaterial activities may be disregarded when assessing taxonomy eligibility and compliance,
- simplified reporting forms and fewer data points,
- Changes to individual criteria related to the “Do No Significant Harm” (DNSH) principle,
- Relief measures regarding certain financial metrics for financial institutions.
The amendments to Delegated Regulation (EU) 2026/73 generally apply to fiscal years beginning on or after January 1, 2026. For fiscal years beginning between January 1 and December 31, 2025, companies may, under the transitional provision, continue to apply the taxonomy rules in effect through December 31, 2025.
The taxonomy requirement and CSRD applicability should nevertheless be assessed separately. The amendments to the CSRD and the Accounting Directive also affect, through the relevant cross-references, which companies will be required to disclose taxonomy information in the future. Delegated Regulation (EU) 2026/73, on the other hand, primarily governs how affected companies prepare their disclosures. Simplified reporting rules therefore do not, on their own, answer the question of whether a company is subject to reporting requirements at all.
Does Omnibus I mean less sustainability data from SMEs?
For many small and medium-sized businesses, the likelihood of an immediate legal reporting requirement is decreasing. However, data requests from within the value chain may still arise—for example, from customers, banks, investors, or public contracting authorities.
The voluntary standard is intended to standardize and limit such requests. Until the delegated act enters into force, the existing VSME provides guidance but does not offer a general guarantee that counterparties will not request additional information.
For small and medium-sized enterprises (SMEs), therefore, a proportionate approach makes sense: systematically collect frequently requested data, define responsibilities, and tailor the effort required to actual stakeholder needs.
Approval and Criticism: How Should Omnibus I Be Assessed?
The higher thresholds and reduced data requirements can reduce the administrative burden on many companies. At the same time, the narrower scope reduces the amount of standardized sustainability information available. This can make it more difficult to compare data across value chains.
Even after Omnibus I, several levels remain relevant in parallel: EU directives, directly applicable regulations, national implementing laws, voluntary standards, and contractual data requirements. The reduction in regulatory burdens therefore does not automatically mean that sustainability data becomes irrelevant in day-to-day business operations.
What Companies Should Do Now
1. Determine the impact for each set of rules separately
Do not assess CSRD, CSDDD, the EU Taxonomy, and LkSG using a single yes/no test. For each legal framework, document the number of employees, revenue, corporate structure, registered office, and relevant fiscal year.
2. Distinguish between current law and the future scope of objectives
Maintain a legal calendar with three columns: already in effect, still to be implemented at the national level, and not yet in effect from a political or regulatory standpoint. This prevents EU targets that have been adopted from being treated as applicable German law too soon.
3. Back up existing data sets
Even if your company is no longer subject to reporting requirements in the future, established processes can still be useful. Review which data is actually needed for management, financing, bids, and customer inquiries.
4. Standardize data requests from the value chain
Record recurring requirements from customers and financial partners. The VSME can serve as a structural guide for voluntary disclosures. Companies should not rely on the specific limiting effect of the Value Chain Cap until the delegated standard is applicable and the directive has been implemented at the national level.
5. Maintain responsibilities and controls
Clearly assign responsibilities for data collection, approval, sources, and updates. Fewer data points do not diminish the importance of reliable evidence for the information that continues to be reported.
6. Build skills in a targeted manner
Teams from sustainability, finance, procurement, legal, and communications should use the same legal framework and terminology. It is particularly important to be able to distinguish between legal obligations, voluntary management information, and contractual customer requirements.
For more information on practical preparation, see the article “Creating a Sustainability Report: Requirements, Structure, and Process.”
Omnibus I Sets New Limits, but No Uniform Start Date
Omnibus I is no longer just a proposal. The amending directive for CSRD and CSDDD is in effect, but has yet to be implemented in Germany. The taxonomy simplifications generally apply to fiscal years beginning in 2026. The revised ESRS and the delegated voluntary standard had not yet entered into force as of September 2026. The value-chain cap is established in the amending directive; its specific implementation through the voluntary standard was not yet applicable as of the reporting date.
For companies, this primarily entails a methodological task: regulations, legal status, scope, and fiscal year must be examined separately and thoroughly. Those who document this classification and collect only the sustainability data that is actually needed can adapt their processes early on without anticipating future relief.
FAQ
What is the EU's Omnibus Initiative?
The Omnibus Initiative is a series of EU simplification packages designed to amend several existing legal acts simultaneously. Omnibus I primarily concerns the CSRD, the CSDDD, and the EU Taxonomy.
Is Omnibus I already in effect?
Yes. Directive (EU) 2026/470 was published on February 26, 2026, and entered into force on March 18, 2026. However, Member States must still transpose its amendments to the CSRD and CSDDD into national law.
Which companies will be subject to the CSRD in the future?
Under EU legislation, the scope generally includes companies and parent companies of large groups that have more than 1,000 employees and net revenue exceeding 450 million euros. Special rules and national implementation must also be examined.
What changes does Omnibus I make to the CSDDD?
The future scope of application generally applies to companies with more than 5,000 employees and more than 1.5 billion euros in net revenue. Due diligence obligations remain risk-based and tied to the chain of activities. The separate requirement to develop a climate plan, the EU-wide liability regime, and a general obligation to terminate business relationships are no longer in effect.
What Changes Are Coming to the EU Taxonomy?
Delegated Regulation (EU) 2026/73 introduces, among other things, a 10 percent materiality threshold, simplified reporting forms, and revised DNSH criteria. The changes generally apply to fiscal years beginning on or after January 1, 2026; for fiscal years beginning in the calendar year 2025, companies may still apply the previous regulations.
What should companies in Germany do now?
Companies should assess their exposure under each set of regulations, distinguish between applicable German law and adopted EU legislation, and maintain a legal calendar. They should prioritize existing data processes based on actual management needs and specific stakeholder requests.
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