Background
The EU Green Deal has been subject to ongoing negotiations and revisions. As part of this trend, several initiatives have been launched to revisit existing EU sustainability legislation, including the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy Regulation (EU Taxonomy).
On 26 February 2025, the EU Commission published two Omnibus packages, including legislative proposals on the postponement of reporting deadlines and reduction of scope of reporting companies (please be referred to our earlier publication).
On 3 April 2025 and 16 April 2025, the EU co-legislators (the European Parliament and the Council) endorsed, via a fast-track procedure, the first Omnibus ‘stop the clock’ proposal to postpone some reporting deadlines under the CSRD and CSDDD (please be referred to our earlier publication). With the formal adoption of the First Omnibus ‘stop the clock’ proposal, the entry into application of the CSRD requirements for large undertakings that have not yet started reporting is postponed by two years, and the transposition deadline and first phase of the CSDDD is postponed by one year.
The second Omnibus aims to reduce the burden of the CSRD, the EU Taxonomy and the CSDDD by at least 25%. This includes simplifying sustainable finance reporting and due diligence requirements to support the European Green Deal’s goals. In this newsflash we will dive deeper into the proposed simplifications.
Final Position of the Council on the second Omnibus adopted on 23 June 2025
The Council adopted on 23 June 2025 its final position on the second Omnibus proposal (the Council’s Final Position). The Council’s Final Position constitutes, in essence, a formal response to the second Omnibus proposal as submitted by the EU Commission on 26 February 2025. The Council’s Final Position broadly aligns with the EU Commission’s proposal in respect of both the CSRD and the CSDDD. This newsflash outlines a selection of amendments introduced in the Council’s Final Position on the second Omnibus.
Companies in-scope under the CSRD
A key change to the scoping of the CSRD is that only (very) large undertakings will be in-scope. Under the amended CSRD, the scoping thresholds will be:
*These thresholds are to be determined on a stand-alone and, if applicable, consolidated basis.
**With these increased thresholds, listed SMEs will no longer be subject to the CSRD.
***A non-EU undertaking will still be subject to the CSRD either because it:
- has securities listed on a regulated market in the EEA and they meet the thresholds set out above (either on a standalone or consolidated basis); or
- is the ultimate parent undertaking of a group that generates over EUR 450 million in the Union for each of the last two consecutive years and has either a large subsidiary undertaking in the EU or has an EU branch that generated over EUR 50 million.
Companies in-scope under the CSDDD
The EU Commission proposes not to amend the current thresholds under the CSDDD to be considered in-scope. However, the Council’s Final Position includes raised thresholds and therefore a (further) reduced scope of the CSDDD:
What’s next?
The European Parliament is expected to adopt its final position in October 2025 regarding the Second Omnibus, after which trilogue negotiations will begin. A final agreement on amendment of the CSRD, CSDDD and the Taxonomy through the second Omnibus is anticipated by the end of 2025 or early within 2026.
Get in touch
ESG litigation and legislation is rapidly increasing and unfolding across multiple avenues. Our firm is closely monitoring ESG litigation and legislation and potential liability and litigation risks in this respect. Feel free to contact one of our colleagues below for more information about the ESG litigation and legislation in the EU.
