The Omnibus Proposal: Insights from denxpert & EFRAG’s Exclusive Webinar

The Omnibus Proposal and EFRAG’s Insights: What It Means for ESG Reporting and Compliance

The European Commission’s recent Omnibus proposal has sent shockwaves through the sustainability landscape, igniting debates on regulatory simplification, corporate responsibility, and long-term business value. In an exclusive webinar hosted by denxpert in collaboration with EFRAG, Robert Szucs-Winkler, CEO of denxpert, and Anna Csonka, denxpert’s senior sustainability reporting expert, tackled the most pressing questions companies face in light of these proposed changes.

Watch Omnibus on-demand webinar

What Led to the Omnibus?

The Omnibus proposal did not emerge in isolation; it is rooted in a series of economic and political pressures that have been reshaping the EU’s regulatory landscape:

• Geopolitical Pressures: The war in Ukraine and global trade tensions raised concerns about the competitiveness of European companies under stringent sustainability regulations. Policymakers feared that extensive reporting requirements could put EU businesses at a disadvantage.
• The Draghi Report (September 2024): The report on EU competitiveness and resilience highlighted sustainability regulations—CSRD and CSDDD—as contributors to high compliance costs, which some argue hinder business growth.
• The Budapest Declaration (November 2024): European policymakers called for a "simplification revolution", demanding a 25% reduction in reporting requirements, particularly to ease the burden on SMEs.
• The EU Competitive Compass Strategy (2025): This broader strategy outlined simplifications across sustainable finance, due diligence, and taxonomy regulations, reinforcing the Commission’s shift toward deregulation.

Anna Csonka, Senior sustainability expert, highlighted during the webinar:

“It’s important to understand why this proposal came forward in the first place. The European Commission is emphasizing competitiveness and reducing administrative burdens, but the big question is: does scaling back sustainability reporting actually make European companies more competitive, or does it just delay progress? That’s the debate we’re in right now.”

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These factors coalesced into the Omnibus proposal, which now seeks to postpone CSRD reporting for two years, reduce the scope of mandatory reporting by 80%, and shift toward voluntary ESG disclosures.

The Heart of the Debate: Simplification or Deregulation?

While the Omnibus proposal is framed as a way to reduce compliance burdens and enhance corporate competitiveness, critics warn that it risks shifting from simplification to outright deregulation. A key concern has emerged in the debate: Does scaling back sustainability reporting truly support competitiveness, or does it undermine transparency and long-term value creation?

As Gemma Sánchez Danes, a member of EFRAG’s leadership team, highlighted:

"This is still a proposal, not a final decision. The European Parliament and the Council of the EU must still approve it, and reaching a consensus will take time. Companies need to stay calm and focus on why they are reporting in the first place. Sustainability reporting is not just a compliance exercise, it’s a strategic tool for risk management and value creation."

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This uncertainty has left many companies in a dilemma—should they continue preparing for CSRD compliance or pause their efforts? But is that really the question? Should sustainability reporting be reduced to a regulatory checkbox, or is it something more—something with real business impact?

A key issue fueling this confusion is that, until the Omnibus proposal is officially adopted, national transpositions of the CSRD remain in effect. Companies that delay preparations, assuming the scope will change or reporting will be postponed, face a significant risk: if the proposal does not pass or if they remain in scope after all, they will be left scrambling to comply at the last minute. The cost of waiting could be higher than the cost of staying the course.

Many major corporations have already made their stance clear: whether or not CSRD obligations are delayed, they will continue their reporting efforts. For them, transparency, accountability, and ESG data are not just regulatory requirements but essential tools for long-term resilience and strategic decision-making. Businesses that take proactive steps now will not only mitigate risk but also gain a competitive advantage in an increasingly sustainability-driven market.

Breaking Down the Omnibus: What’s Changing?

1. CSRD Scope & Timeline: "Stop the Clock" Modification

One of the most significant changes proposed in the Omnibus is a two-year postponement of CSRD reporting obligations for companies in the second and third waves. This delay is intended to prevent companies from investing heavily in compliance only to be exempted later due to regulatory revisions. However, because the Omnibus is still just a proposal, many businesses find themselves in a state of so-called limbo. While the EU Parliament and Council review the proposal, the "Stop the Clock" timeline could take up to five or six months to be approved, leaving companies unsure of their next steps.

For corporations set to begin reporting in 2025, the situation is particularly frustrating. Many have already invested substantial resources into compliance, only to now question whether those efforts were wasted. But is that really the case?

If the modification regarding the CSRD legislation is accepted, the scope will be significantly narrowed. Companies will need to meet two out of the three key criteria to remain in scope:

• 1,000+ employees
• Annual turnover exceeding EUR 50 million OR a balance sheet total above EUR 25 million

This revision would result in an 80% reduction in the number of companies required to report, effectively removing many previously included businesses from the mandatory reporting framework. For those now outside the scope, the question remains: Should they abandon their sustainability reporting efforts, or will transparency and ESG data continue to play a strategic role in their long-term business success?

Robert Szucs-Winkler, CEO of denxpert, commented on the practical implications:

“Some mid-sized companies told us that the amount of investment they had to put into adapting CSRD and starting the reporting process was overwhelming. They had planned budgets for sustainability initiatives but had to redirect everything toward compliance. Now, with this proposal, they face uncertainty about whether that investment created value at all.”

2. Voluntary Reporting: What’s Next for Non-CSRD Companies?

With a substantial number of companies potentially falling out of mandatory reporting, a key question emerges: Will voluntary standards bridge the gap?

The European Commission suggests that companies outside the CSRD scope may voluntarily report under a new standard, possibly based on the VSME framework. However, this remains speculative, as EFRAG has not yet been formally mandated to develop such a standard.

Experts stress a crucial distinction: unlike the ESRS framework, it lacks depth and does not follow a materiality-based approach. The framework includes only 20 disclosures, failing to comprehensively cover critical social and governance aspects. It is not a ‘fair view’ presentation.

This distinction raises concerns about the comparability and credibility of voluntary reporting, particularly for investors and financial institutions that rely on standardized ESG data. Without a cohesive and regulated framework, will voluntary disclosures provide the level of transparency needed to drive sustainable business practices?

For now, much remains uncertain—until the EU Commission issues a formal mandate, discussions around a new voluntary standard remain purely speculative.

3. EU Taxonomy: From Mandatory to Opt-In

Another key shift in the Omnibus proposal is the transition of the EU Taxonomy into an opt-in regime. Under the new framework:

• Large companies (1,000+ employees, EUR 450 million turnover) can voluntarily report if they claim full or partial alignment with the EU Taxonomy.
• The requirement to meet all technical screening criteria is relaxed, meaning companies can disclose partial alignment instead of full compliance.
• Those who opt in must disclose turnover and CapEx KPIs, with the option to disclose OPEX KPIs.

This change could lead to the fragmentation of sustainability data, making it harder for investors and stakeholders to assess corporate sustainability performance.

The Bigger Picture: Why This Matters

The Omnibus proposal is just that—a proposal. It still has to pass through the European Parliament and Council, facing divided opinions. However, the broader conversation it has sparked is critical:

• Does sustainability reporting support or hinder competitiveness?
• Will companies voluntarily report if no longer required to do so?
• How will investors navigate an increasingly fragmented data landscape?

The narrative around CSRD and CSDDD must shift from cost burden to long-term value creation. Sustainability reporting is more than compliance—it’s a management framework that helps companies understand risks, improve operations, and align with investor expectations.

The coming months will determine the fate of the Omnibus proposal. But one thing is clear: Companies that continue their sustainability journey will be better prepared for the future, regardless of regulatory shifts.

Watch the on-demand webinar for a deeper dive into the discussion. Gain expert insights and stay ahead of regulatory changes in sustainability reporting.

What Does This Mean for Your Reporting?

For now, not much has changed. The national transposition of CSRD remains in effect in most EU countries, meaning businesses in scope are still expected to report unless the legislative process officially alters these requirements. But beyond compliance, ESG reporting is about more than just regulations—it’s about building trust, managing risks, and driving long-term business value.

What should companies do next?

Rather than hitting pause, companies should evaluate their reporting obligations based on their country’s legal framework and keep a close eye on regulatory developments. Whether or not the Omnibus Proposal moves forward, sustainability expectations from investors, financial institutions, and stakeholders remain high.

Stay ahead of the changes with denxpert’s CSRD software. Our platform simplifies sustainability reporting, helping companies meet ESRS requirements with structured templates, automated data collection, and real-time regulatory updates. Be prepared, stay compliant, and ensure your ESG efforts continue to create value.