• The EU Parliament has approved the Omnibus I package, significantly reducing the scope of sustainability reporting and due diligence rules.
• CSRD will apply only to companies with more than 1,000 employees and over € 450 million in annual turnover, removing around 90% of firms from scope.
• Due diligence obligations under CSDDD will apply only from 2029 and only to companies with more than 5,000 employees and €1.5 billion in revenue.

Parliament clears Omnibus I package

The EU Parliament has approved a provisional agreement with EU member states to scale back sustainability reporting and due diligence requirements for companies, marking one of the final legislative steps toward adoption of the Omnibus I package.

The agreement passed with 428 votes in favour, 218 against, and 17 abstentions. It now awaits formal approval by the Council of the European Union before entering into force 20 days after publication in the EU’s Official Journal.

Launched by the European Commission in February 2025, Omnibus I is designed to simplify sustainability-related regulation and reduce administrative burdens on companies, with the stated aim of strengthening EU competitiveness.

Sustainability reporting narrowed under CSRD

Under the approved agreement, sustainability reporting requirements under the Corporate Sustainability Reporting Directive will apply only to EU companies with more than 1,000 employees and net annual turnover exceeding €450 million.

The same turnover threshold will apply to non-EU companies operating in the single market, as well as to subsidiaries and branches generating more than €200 million in annual turnover within the EU.

Sector-specific sustainability reporting will become voluntary, and companies with fewer than 1,000 employees will be protected from being required to provide additional information beyond the voluntary sustainability reporting standard for SMEs.

To support compliance, the European Commission will establish a digital portal providing templates and guidance on EU and national reporting requirements.

Due diligence rules scaled back and delayed

The changes to the Corporate Sustainability Due Diligence Directive are more far-reaching. Due diligence obligations will apply only to EU companies with more than 5,000 employees and net annual turnover above €1.5 billion, as well as non-EU companies meeting the same turnover threshold within the EU.

Companies will be required to take a risk-based approach to their value chains, focusing on areas where actual or potential adverse impacts are most likely. They should request information from business partners with fewer than 5,000 employees only when it cannot reasonably be obtained through other means.

Mandatory climate transition plans aligned with the Paris Agreement have been removed, and the EU-wide civil liability regime has been eliminated. Enforcement will take place at national level, with potential fines capped at 3% of a company’s net global turnover.

The revised due diligence rules will apply from 26 July 2029.

Balancing simplification and sustainability goals

Supporters of the agreement argue that the Omnibus I package strikes a balance between regulatory simplification and preserving the core objectives of EU sustainability legislation.

The revised CSRD will still apply to an estimated 5,100 to 7,800 companies, retaining the double materiality principle while reducing data requirements by 60–70% and allowing auditors to follow more flexible verification guidelines to lower costs.

Similarly, the CSDDD will apply to just under 1,000 companies, with obligations focused on identifying and addressing real risks rather than exhaustive value-chain mapping.

Rapporteur Jörgen Warborn said the vote delivered “historic cost reductions while keeping Europe’s sustainability goals on track,” calling it “an important first step in the ongoing efforts to simplify EU rules.”

Next steps

Following Parliament’s approval, the Omnibus I package must now receive formal sign-off from the Council of the European Union. Once adopted and published, the revised rules will enter into force within 20 days.

The EU Parliament’s approval of the Omnibus I package marks a decisive shift in the bloc’s approach to sustainability regulation, signalling a move toward narrower scope, later enforcement, and a stronger emphasis on competitiveness—while maintaining the underlying architecture of EU sustainability law.

Focus keyphrase: EU Parliament approves Omnibus I package
Meta description (158 characters): EU Parliament approves the Omnibus I package, sharply reducing CSRD and CSDDD scope, easing reporting burdens, and delaying due diligence rules until 2029.