Main changes in regulations: CSRD | CSDDD | EU Taxonomy | CBAM | What should companies do now
On 26 February 2025 the European Commission released a package of proposals (鈥瀘mnibus package鈥�) aimed at significantly scaling down several sustainability regulations in Europe that are either in effect already or about to take effect.
What regulations affect the 鈥淥mnibus package鈥�?
The main regulations affected are the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Dilligence Directive (CSDDD), the Eurepean Union Taxonomy Regulation (EU Taxonomy), the Carbon Border Adjustment Mechanism (CBAM) and Invest EU.
These are proposals, not a final regulatory decision. The proposals need to make their way through review, comment and approval process and then be implemented as law in each of the EU member states. Companies should stay tuned to developments even as they prepare for compliance in the near term.
Author
Katar铆na Havl铆kov谩
Senior Consultant, ESG
What are the main changes in CSRD regulation?
- Removes listed small and medium entities (SMEs) from scope.
- Commits to issue voluntary sustainability reporting standards for companies under 1000 employees based on EFRAG麓s Voluntary Sustainability Reporting Standards (VSME) for non-listed SMEs.
- Limits information requests by companies for SMEs in their value chain to reduce the trickle-down effect. Requested information should be in line with and not exceed the scope of the VSME standard or sector-typical information.
- Plans for a revision and update of the current European Sustainability Reporting Standards (ESRS), including a reduction of the number of required data points and prioritization of quantitative data points over narrative data points.
- Retains the limited assurance requirement, but there will be transition to reasonable assurance.
- Leaves double materiality analysis (DMA) unchanged.
- Remains the requirements to tag data through the European Single Electronic Format (ESEF) for CSRD reports but only when such rules are adopted by the EU.
- Removes the previously proposed introduction of sector-specific standards.
Table 1. Current versus proposed CSRD scope and timeline:
(click for full resolutions )
What are the main changes to CSDDD regulation?
- Delays the compliance deadline for the first companies subject to the CSDDD to July 2028 (remaining criteria for EU companies: 藘3000 employees and 藘900 mil 鈧� turnover in the EU).
- Retains the July 2029 deadline for EU companies with 藘1000 employees and 藘450 mil. 鈧� turnover and for non-EU companies with 藘450 mil 鈧� turnover in the EU.
- Reduces the obligation to systematically conduct in-depth assessments of adverse impacts to cases when the company suspects such impacts.
- Limits the diligence process to direct (Tier 1) business partners, but companies must assess indirect business partners if they receive 鈥瀙lausible鈥� information about potential adverse impact from an indirect partner.
- Restricts information requests for business partners with fewer than 500 employees to the details specified in the voluntary standards.
- Reduces the frequency of periodic assessments of adequacy and effectiveness of due diligence measures from once a year to once every five years.
- Removes the civil liability provision at the EU level, leaving it to the discretion of individual member states to codify or not.
- Removes the duty to terminate the business relationship as a measure of last report.
- Retains the requirement for companies to adopt a transition plan for climate change mitigation but they would no longer be required to put the transition plan into effect.
What are the main changes in EU Taxonomy?
- Makes taxonomy alignment reporting mandatory only for companies with more than 1000 employees and more than 450 mil 鈧� in turnover. Note: that this makes it possible for some companies to be in scope for the CSRD but not the Eu taxonomy.
- Proposes to simplify certain 鈥瀌o no significant harm鈥�(DNSH) criteria.
- Removes the mandatory reporting on taxonomy-aligned operational expenditure while keeping reporting on taxonomy-aligned turnover and capital expenditure mandatory.
- Proposes the simplification of the reporting templates.
- Allows companies to report partial EU Taxonomy alignment.
- Introduces flexibility to assess taxonomy eligibility and taxonomy alignment only for activities that are financially material for the business (through introducing a de minimis materiality threshold of more or equal to 10% of the KPI麓s denominators).
- Amends the green asset ratio (GAR) for banks, allowing them to exclude from calculation companies that are proposed to fall out of scope for the CSRD (those with less than 1000 employees)
What are the main changes to CBAM obligation?
- Exempts small importers from CBAM obligations (mostly SMEs and individuals)
- Simplifies, for those remaining in scope, the calculation and reporting
What happens next and what should companies do now?
Companies should:
- keep eyes open on the developments, subscribe to updates and participate in the public commenting process;
- continue to prepare Sustainability way and reporting and do not slacken in the transition to sustainability and prepare a report according to the law;
- closely monitor progress towards decarbonization and competitiveness objectives and gradually add new 鈥済reen鈥� KPIs;
- identify urgent decarbonization priorities and cooperate with experts and industrial clusters.
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