Omnibus package approved: what changes in the CSRD, ESRS and CSDDD?

After months of business pressure and debate around competitiveness, the European Union has approved the so-called ESG Omnibus Package 2026: a reform, set out in Directive (EU) 2026/470, that substantially amends the CSRD, the ESRS standards and the Corporate Sustainability Due Diligence Directive (CSDDD).

The official objective is to simplify the regulatory framework and reduce the administrative burden for European companies. But the effect of the reform is that the number of companies required to report under the CSRD falls drastically, with around 80% of the companies previously expected to report now outside the mandatory scope, and that technical requirements are simplified.

Is it regulatory relief? Yes.

Does it mean ESG pressure disappears? Not at all.

Here is exactly what changes, who is affected and why, because even if your company falls outside the mandatory scope, the strategic data challenge remains on the table. For an overview of the simplification process, we have also analysed how the EU is simplifying ESG regulation with the Omnibus Regulation.

Changes to the CSRD in 2026: new scope and thresholds

The most visible change concerns who has to report. Under the previous framework, companies that exceeded the following were obliged:

• 250 employees
• €50 million in turnover

Now, with the Omnibus Directive, the threshold rises considerably. Only companies that exceed both criteria at once will be required to report:

• 1,000 employees
• €450 million in net turnover

The adjustment is enormous. Thousands of mid-sized companies that were preparing to report fall outside the mandatory scope, and listed SMEs are fully exempt.

What about non-European companies?

The rules change here as well.

For third-country companies, specific cumulative thresholds apply:

• €450 million in net turnover generated within the European Union, in each of the last two consecutive financial years.
• And a subsidiary or a branch in the EU with net turnover above €200 million.

In addition, Member States may introduce exemptions for companies that had already started reporting under the previous regime and would now fall outside. One caveat worth noting: until a Member State activates that exemption, first-wave companies remain obliged to report the 2025 and 2026 financial years.

The message is clear: the focus shifts back to large corporations.

ESRS simplification: what changes in the reporting standards

If the CSRD sets out who has to report, the ESRS set out how and in what level of detail. In practice, they are the technical manual of sustainability reporting. And that is where the Omnibus introduces one of the most relevant changes.

The original version of the standards envisaged more than a thousand possible data points: environmental, social and governance indicators at a highly granular level. The revised ESRS, adopted by the Commission in a delegated act on 3 July 2026, cut more than 60% of mandatory data points and more than 70% of the total. This reduction is in line with the changes and the Quick Fix to the ESRS already introduced.

What does this mean in practice? Fewer mandatory indicators, fewer complex breakdowns and less documentation burden. Voluntary disclosures and the mandatory sector-specific standards that had been planned also disappear, which reduces the technical pressure on specific industries. The materiality assessment is made more flexible through a top-down approach. The revised standards apply to financial years starting on or after 1 January 2027, with early adoption possible for 2026 financial years.

In parallel, the Commission adopted on the same day a voluntary standard based on the VSME, aimed at companies outside the mandatory scope. Its role is twofold: to give them a recognisable format for answering clients and banks, and to act as a cap on what a large company can request from its value chain.

Double materiality remains the core of reporting

One element that remains intact is the principle of double materiality, which continues to be the core of European reporting.

This means companies must assess and report from two perspectives:

• How environmental, social and governance factors impact their financial position (financial materiality).
• How their activity impacts the environment and society (impact materiality).

Although the volume of required data is reduced, the underlying logic does not change. Companies that remain within scope must continue to carry out a structured double materiality assessment and justify what information they report and why.

Another key point: the level of assurance

The initial roadmap pointed towards moving to so-called reasonable assurance, a type of assurance similar to a financial audit, deeper and more demanding. With the Omnibus, that escalation is removed from the legal text. Only limited assurance is retained, and its specific assurance standard must be adopted before 1 July 2027.

That said, simplifying does not mean relaxing the basic requirement. Companies that remain within scope must continue to demonstrate coherence, traceability and consistency in their data. The difference lies in the volume of information, not in the need for it to be well structured.

New CSDDD 2026: changes in scope, timing and obligations

The adjustment does not stop at the CSRD. The Corporate Sustainability Due Diligence Directive (CSDDD), one of the most ambitious pieces of the European ESG package, is also reshaped. And it does so on three fronts: scope, timeline and requirements.

First, the application threshold rises significantly. Only companies with 5,000 or more employees and turnover above €1.5 billion will remain within scope, compared with the 1,000 employees and €450 million originally planned. For third-country companies, the criterion is €1.5 billion in EU turnover.

Second, the timeline is delayed. Uniform application shifts to 26 July 2029, with Member State transposition due by 26 July 2028, giving affected companies more room to adapt their internal processes.

And third, some of the most relevant obligations of the original text are softened. The requirement to adopt and implement a climate transition plan disappears, and the civil liability regime is no longer harmonised at European level: each Member State will define how it articulates this in its national legislation.

In addition, a clause designed to protect smaller suppliers from excessive information requests by large companies is introduced. A relevant point for SMEs that, although not directly obliged, are part of international supply chains.

Implementation timeline of the ESG Omnibus Package 2026

Once the underlying change is understood, it is time to look at the dates, because not everything happens at the same time.

• 18 March 2026: Omnibus Directive (EU) 2026/470 enters into force at European level.
• 3 July 2026: the Commission adopts the revised ESRS and the voluntary standard based on the VSME.
• By March 2027: Member States must transpose the directive into national law.
• 1 January 2027: the new CSRD scope begins to apply, for financial years starting on that date. This is when many companies will formally stop being obliged.
• 26 July 2028 and 26 July 2029: transposition and uniform application of the new CSDDD under the revised thresholds.

Is it really relief for companies?

From a legal standpoint, yes: the change is relief.

Many mid-sized companies leave the mandatory perimeter. There will be fewer indicators to report and more room in the deadlines. On paper, it looks like good news.

But the market has not slowed down at the same pace:

• Investors continue to demand ESG metrics.
• Large companies will keep requesting data from their supply chain.
• Banks continue to incorporate sustainability criteria into their risk analyses.
• And customers compare environmental performance more and more.

Many companies had already started organising their data, understanding their impact and structuring internal processes. That is not just "compliance". It is gaining control.

Undoing that work now may seem like a saving. But it may also mean falling behind when the requirement returns, because it will return.

In the end, the difference is no longer just about being obliged. It is about being able to respond with data when someone requires it. If your company falls outside the new mandatory scope, the decision is no longer regulatory. It is strategic.

At Manglai we help companies structure, automate and maintain their environmental information with rigour and efficiency, whether or not they are required to by regulation. You can see how we approach reporting in line with the CSRD.

Frequently asked questions about the ESG Omnibus Package

When does the Omnibus Directive enter into force?

Directive (EU) 2026/470 entered into force on 18 March 2026. Member States have until March 2027 to transpose it into national law.

Which companies remain subject to the CSRD?

Only those with more than 1,000 employees and over €450 million in net turnover, from financial years starting on 1 January 2027.

Are the ESRS eliminated?

No. They are significantly simplified: the revised ESRS, adopted on 3 July 2026, cut more than 60% of mandatory data points and more than 70% of the total.

Will assurance move to reasonable assurance in the future?

No. Directive (EU) 2026/470 removed that prospect. The required level is, and will remain, limited assurance.

Does the CSDDD already require climate transition plans?

No. The new version removes that obligation and postpones uniform application to 26 July 2029.

If my company falls outside the mandatory scope, can I stop reporting?

Legally, you may be able to. Strategically, it will depend on your investors, customers and position in the value chain.