EU Omnibus I Explained: Major Changes to CSRD and ESRS Ahead

What the Omnibus I Shift Means for Future CSRD and ESRS Obligations

The European Parliament has taken an unexpected step toward scaling down mandatory sustainability reporting. By adopting its position on the Omnibus I package, the Parliament opened the door to major revisions of the CSRD and ESRS frameworks.

Although nothing is final, this vote sets the starting point for trilogue negotiations that may redefine the scope and intensity of EU sustainability reporting. The central question now is how much of this proposed reduction will survive in the final legislation.

A Radical Pivot in CSRD and ESRS Policy

Parliament’s position goes far beyond the European Commission’s original simplification objectives. Instead of making technical adjustments, lawmakers endorsed a broad reduction of sustainability reporting requirements, signalling a notable shift away from the ambition of the original CSRD framework.

On 13 November 2025, Members of the European Parliament approved their negotiating stance on Omnibus I by 382 to 249.
What the Commission initially designed as a narrow, technical simplification evolved into a significantly broader rollback once it reached Parliament.

Political alignment behind the vote

Support from the EPP, along with right-wing and far-right groups, pushed the proposal through. A notable departure from previous cross-party collaboration. The vote indicates a shift toward easing administrative burdens over maintaining the ambition of the original CSRD design.

For businesses, this creates a mixed picture: fewer disclosure obligations could reduce compliance costs, but reduced transparency may weaken investor trust at a time when markets increasingly expect reliable sustainability information.

These proposals will now be reviewed in trilogues.

Proposed Reduction of More Than 90 Percent

The most significant change concerns which companies will remain in scope for CSRD reporting. The Parliament proposes raising the threshold to 1,750 employees and €450 million turnover, which would result in over 90 percent of the companies originally covered by CSRD no longer being required to report.

To put it in perspective, an organisation employing 1,750 people is similar in size to a mid-tier airline or a large regional hospital. Illustrating how restrictive this threshold would be. This change would also mean that fewer companies would be required to report than under the NFRD, the predecessor of CSRD that was widely criticised for its limited scope and lack of effectiveness.

Deep Cuts to the CSDDD

Under Parliament’s preferred model, only the very largest multinationals would fall under the Corporate Sustainability Due Diligence Directive.

Parliament’s thresholds:

• 5,000 employees
• €1.5 billion turnover

Climate transition plans would also cease to be mandatory, and large companies would no longer be able to request extensive sustainability data from SMEs.

Structural Changes to ESRS and Taxonomy

Parliament also proposes changes that would reshape the sustainability reporting architecture:

• A Simplified ESRS with reduced narrative disclosures
• Sector-specific ESRS becoming voluntary
• Tighter limits on SME data requests
• EU Taxonomy reporting applying to a far smaller group of companies

This would significantly reduce the quantity and quality of sustainability information available in the market.

Political Drivers Behind the Vote

The Omnibus I vote reflects a broader repositioning in the European Parliament. The EPP, supported by segments of Renew and the S&D, formed an alliance with right-wing and far-right parties to push through a more drastic reduction than previously anticipated.

Critics warn this weakens the EU’s climate and sustainability ambitions. Some sustainable finance bodies called the vote a “public alliance against sustainability.”

What Happens Next? (Trilogues)

The Parliament’s vote defines only one side of the negotiation. Trilogue discussions begin on 18 November, with the aim of reaching an agreement by the end of 2025.

Starting positions

• Parliament: 1,750 employees + €450M revenue
• Council: 1,000 employees + €450M revenue
• Commission: 1,000 employees, no revenue threshold

These conflicting positions ensure that uncertainty will persist for several months.

Implications for Business Strategy

If Parliament’s version survives negotiations:

• Only ~3,000 companies would report under CSRD
• Value-chain data collection may weaken
• Comparability across sectors will drop
• Due diligence obligations would narrow considerably
• Climate transition plans would vanish from mandatory requirements

The result could be a fragmented and less reliable sustainability-data ecosystem.

Market Demands Will Continue Despite Deregulation

Even if legal obligations shrink, companies will still need sustainability data for:

• bank financing
• investor assessments
• insurance risk modelling
• supply-chain qualification
• global export requirements

By 2030, emissions and climate data are expected to be integrated into most corporate lending models. Companies will still be expected to provide information, even if not legally required.

Voluntary transparency may become a competitive advantage.

Navigating CSRD and ESRS After the Omnibus Vote

The Omnibus I vote marks a major turning point for EU sustainability regulation. Regardless of whether the final agreement maintains significant cuts or moves toward a more balanced compromise, one fact remains constant:

Market expectations for sustainability information will continue, even if legal obligations narrow.

Companies now face a strategic decision: comply at the minimum level required or maintain a broader sustainability framework that protects competitiveness, investor trust, and long-term resilience.