The "Omnibus Proposal" for a directive amending certain European corporate sustainability reporting and due diligence requirements, together with its legislative process, has been widely debated at the political level and beyond.

Ten months after the European Commission published its Omnibus proposal (see our February article) and following three weeks of trialogue negotiations, the Commission, Council and European Parliament reached an agreement on the provisions. See our June article for the Council's negotiating position and our November article for the Parliament's negotiating position.

This agreement is still subject to formal adoption. The Council approved the text on 10 December 2025, followed by approval in the European plenary on 16 December 2025. The final adoption of the Omnibus directive is expected in early 2026, following legal review and linguistic checks.

Final key CSRD amendments

New scope and exemptions

• Narrowed scope – The scope of the CSRD will be limited to companies, including issuers within the meaning of the Transparency Directive, with more than 1,000 employees and an annual net turnover exceeding EUR 450 million. The new scope will also extend to parent companies of groups meeting the thresholds on a consolidated basis. The EU institutions introduced a review clause for potential future adjustments to the scope.
• Possible exemption for certain "first wave" companies – Member states are provided with the option to exempt "first wave" companies that fall outside the CSRD's scope under the revised thresholds, from their reporting obligations relating to financial years 2025 and 2026 (and therefore not for 2024). The Dutch government has indicated that the intention is to apply this exemption in the Netherlands.
• Exemption for certain financial holding companies – The agreement provides an exemption for parent companies whose sole purpose is to acquire and manage shareholdings for profit without directly or indirectly participating in the management of those companies (subject to their rights as shareholders) and whose subsidiaries have business models and operations independent from one another.
• Extension of the subsidiary exemption – The agreement provides that the exemption from having to prepare a sustainability statement if the parent company reports on a consolidated basis – as currently included in the CSRD – will be extended to all listed subsidiaries.
• New thresholds for "light" third-country parent report – The agreement sets the scope of the "light" sustainability reporting regime concerning third-country companies at EUR 450 million net turnover within the EU for the parent company, and EUR 200 million global net turnover for the relevant subsidiary or branch.

Introduction of a value chain cap

The agreement introduces a value chain cap by allowing companies within the reporting entity's value chain with fewer than 1,000 employees ("protected undertakings") to refuse information requests that exceed the requirements following from the yet-to-be-developed "voluntary reporting standard". Where a reporting entity nevertheless requests information beyond those limits, it must inform the protected undertaking of the additional information sought and of its statutory right to refuse.

To ensure proportionality, the value-chain cap is subject to specific limitations. Companies reporting in line with these limitations will be deemed to have fulfilled their value chain reporting obligations, and assurance providers should reflect the application of the value chain cap in their assurance opinions.

No future sector-specific reporting requirements

To prevent an increase in the number of data points that companies must report, the Commission’s authority to adopt sector-specific reporting standards has been removed. This means companies will not need to comply with any additional sustainability reporting standards (ESRS) beyond the already adopted sector-agnostic ESRS, which are also to be revised (see below).

No future reasonable assurance requirement

The provision to authorise the Commission to establish reasonable assurance standards by 1 October 2028 has been removed, effectively capping the assurance provider's review at the limited assurance level.

Omitting certain information

In exceptional cases, and subject to specific conditions, companies will be permitted to omit certain information. This includes situations where disclosure would be seriously prejudicial to the reporting entity’s commercial position, would reveal trade secrets, involves classified information, or concerns information that must be protected from unauthorised access or disclosure under Union or national law, including to safeguard the privacy or security of natural persons or the security of legal persons. This latter exemption is included with a view to the current geopolitical situation.

Transitional period for acquisitions and mergers and for exits

The agreement provides for a transitional period following an acquisition or merger. During this period, the reporting entity may defer reporting for the newly acquired or merged company to the next financial year. The company may also decide not to include information regarding any subsidiary that exits the group during the financial year. During the same period, the parent company must disclose any significant events affecting the subsidiary during the financial year that have an impact on the group’s sustainability-related impacts, risks or opportunities.

Digital marking-up of sustainability reporting

The agreement clarifies that, until the rules on the digital marking-up of sustainability reporting are adopted by way of a delegated regulation, companies will not be required to mark up their sustainability reporting.

Member states will be allowed to provide that the collective responsibility of board members does not extend to ensuring compliance with digital marking-up requirements.

Timing

Following formal adoption, member states must implement the CSRD amendments within 12 months after the directive enters into force, so potentially by early 2027.

The existing CSRD rules will continue to apply to the current "first wave" of companies for financial years 2024 through 2026, subject to any transitional exemption for certain "first wave" companies for financial year 2025 and 2026. The revised CSRD rules will apply from financial year 2027, at which point "first wave" companies that do not meet the new thresholds will fall outside the CSRD's scope.

At the end of this article, we discuss the current status of the CSRD's implementation in the Netherlands.

Final key CSDDD amendments

New scope

The scope of the CSDDD will be limited to EU-companies with more than 5,000 employees and an annual net turnover exceeding EUR 1.5 billion, and non-EU companies with an EU turnover above EUR 1.5 billion. Similar to the CSRD, the European institutions have included a review clause allowing for potential future adjustments to the scope.

Maximum harmonisation

The agreement seeks to extend the scope of maximum harmonisation to several additional CSDDD provisions, including article 6 (due diligence at group level), 9 (prioritisation), 10 (1) to (5) (preventing potential adverse impacts), 11 (1) to (5) (bringing actual adverse impacts to an end), 15 (monitoring) and 16 (communicating).

Due diligence requirements amended

The agreement emphasises a risk-based approach to due diligence. Companies will no longer be required to conduct a comprehensive mapping exercise but, instead, carry out a more general scoping exercise based on reasonably available information, to identify general areas across their own operations and those of their subsidiaries and their business partners where adverse impacts are most likely and most sever.

Based on the outcome of the scoping exercise, companies must carry out an in-depth assessment. Information may be requested from business partners only where this is necessary, and, in the case of business partners with fewer than 5,000 employees, only where the information cannot reasonably be obtained by other means. Where information can be obtained from multiple business partners, companies should prioritise making requests to those partners where adverse impacts are most likely. Where adverse impacts are equally likely or severe across several areas, companies may prioritise assessments involving direct business partners. The agreement outlines that, in view of their right to prioritise, companies will not be exposed to penalties under article 27 of the CSDDD for less serious adverse impacts that they have not addressed.

No requirement to end business relationship as last resort

The agreement removes the obligation to terminate business relationships as a last resort. The agreement provides that as long as there is a reasonable expectation that an enhanced prevention action plan will be effective, the mere fact of continuing to engage with the business partner will not expose the company to penalties or liability under the CSDDD.

Due diligence at group level limited

Member states must ensure that, subject to certain conditions, parent companies are allowed to fulfil the due diligence obligations set out in articles 7 to 11 of the CSDDD on behalf of in-scope subsidiaries, provided this ensures effective compliance. Under the original CSDDD, this group-level approach extended to articles 7 to 16.

Stakeholder definition narrowed and engagement limited

The agreement narrows the stakeholder definition to employees, including employees of the company's subsidiaries and business partners, and to their trade unions and workers’ representatives. And also to individuals and communities whose rights or interests are or could be directly affected by the products, services and operations of the company, its subsidiaries and its business partners. This group includes the legitimate representatives of those individuals or communities.

The agreement also restricts the stages of the due diligence process that require stakeholder engagement, by eliminating the duty to engage with stakeholders (i) when deciding to terminate or suspend a business relationship, as the termination requirement has been removed from the CSDDD, and (ii) as appropriate, when developing qualitative and quantitative indicators for monitoring.

Monitoring interval extended

The agreement extends the frequency for companies to regularly monitor the adequacy and effectiveness of their due diligence measures, from once a year to every five years. Additionally, the agreement introduces a new requirement: companies must conduct ad hoc assessments whenever measures taken to address actual or potential impacts prove to be inadequate or ineffective.

Abolishment of climate transition plan obligation

The obligation for companies to adopt and put into effect a transition plan for climate change mitigation has been abolished. However, the existing CSRD requirement to report on transition plans that are in place, remains.

EU-wide civil liability regime abolished and cap on fines

The agreement sets a harmonised maximum cap on penalties of 3% of the company’s annual net worldwide turnover. The Commission, in collaboration with member states, will issue guidance to assist supervisory authorities in determining the appropriate penalty levels. In addition, the EU-wide civil liability regime has been abolished.

Removal of financial sector review clause

The possibility for the Commission to submit a report to the European Parliament and the Council on the potential future sustainability due diligence requirements tailored to the financial sector has been deleted.

Timing

The agreement postpones the application of the CSDDD by an additional year. Member states will have until July 2028 to transpose the directive, and companies will be required to comply with its provisions from July 2029 onwards.

General revision and simplification of the sustainability reporting standards

As part of the Omnibus simplification agenda, the sector-agnostic ESRS, on the basis of which "first wave" companies currently prepare their sustainability statements, are being significantly revised.

EFRAG, the organisation responsible for advising the Commission on European reporting standards, submitted the draft of the revised ESRS to the Commission on 3 December 2025. The draft proposes a 61% reduction in mandatory datapoints, focussing on information usefulness and emphasising fair presentation to support more relevant and less compliance-oriented reporting. Also, the double materiality assessment has been simplified to avoid unnecessary administrative burdens.

The revised ESRS are expected to be adopted by the Commission by mid-2026 through a delegated act, with mandatory application planned for the 2027 financial year (with possible voluntary application for the 2026 financial year).

Dutch CSRD implementation – state of play

Given the progress of the Omnibus directive and its short implementation period, the Dutch government intends to incorporate the required Omnibus changes into the ongoing CSRD implementation process, while retaining the requirement for "first wave" companies to report from the 2024 financial year onwards. The CSRD implementing bill and the draft CSRD implementation decree will be aligned with the final Omnibus directive. At its procedural meeting of 18 December 2025, the Standing Committee on Finance decided to schedule a legislative debate on the implementing bill for 2 March 2026.

The necessary Stop-the-Clock amendments postponing certain CSRD and CSDDD requirements, due by 31 December 2025, have already been included in the current Dutch CSRD implementation drafts (see our September article). Given the proposed Omnibus implementation plan, the transposition deadline will not be met. However, since the current CSRD has also not been implemented yet, there is, in practice, no effective reporting obligation for companies in scope of the Stop-the-Clock.