EU Approves Omnibus I: CSRD and CS3D

The Council and the European Parliament have formally approved the 'Omnibus I' package, finalising amendments to both the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D). The reforms follow a provisional political agreement on 9 December 2025 and were subsequently approved by the European Parliament at plenary on 16 December 2025, with the Council also giving its formal approval. The approved text can be found here. 

This final package is the culmination of a months-long drive towards simplification and competitiveness within the EU, originally set in motion by Ursula von der Leyen’s speech to the European Parliament late last year. The agreement marks a significant step in the institutions' work to consolidate the sustainability reporting landscape.

The final text will now be published in the Official Journal of the European Union and will enter into force 20 days after publication. Member States will then have 12 months to transpose the amendments into national law. The CS3D amendments must be transposed by 26 July 2028. 

Key changes 

1. The Omnibus I reforms materially narrow the application and defer key compliance obligations of the CSRD and CS3D regimes. The most important confirmed changes are summarised below.
2. CSRD

• EU companies: CSRD will apply only to EU companies with more than 1,000 employees and with a net annual turnover exceeding €450 million.
• Non-EU companies: CSRD will only apply to non-EU companies with a net annual turnover in the EU exceeding €450 million for each of the last two consecutive financial years and that have an EU subsidiary or branch generating more than €200 million in EU turnover.
• Financial holding companies: Where a financial holding company’s subsidiaries have independent business models and operations, the parent may elect not to prepare consolidated sustainability reporting. Individual subsidiaries remain subject to their own reporting obligations where they independently meet the CSRD thresholds.
• Transitional relief: Companies that were required to start CSRD reporting for financial year 2024 but fall outside the revised scope may be exempted by Member States from reporting obligations for financial years 2025 and 2026.
• Simplified reporting: Reporting requirements will be simplified, with greater emphasis on quantitative disclosures. The Commission’s power to adopt mandatory sector-specific sustainability standards has been removed and replaced with the ability to issue non-binding guidance. Companies with fewer than 1,000 employees may refuse value-chain information requests that exceed the content of the voluntary sustainability reporting standards.  

1. CS3D

• EU companies: CS3D will apply only to EU companies with more than 5,000 employees and net turnover exceeding €1.5 billion.
• Non-EU companies: The position is stricter for non-EU companies, as CS3D will apply where a company’s EU turnover exceeds €1.5 billion, with no employee threshold.
• Risk-based due diligence: Prescriptive value-chain mapping obligations are replaced with a risk-based approach, allowing companies to prioritise areas where adverse impacts are most likely or most severe, and to limit information requests to what is reasonably necessary.
• Climate transition plans removed: The obligation to adopt and implement a climate transition plan under CS3D has been removed. This does not affect CSRD requirements to disclose information about transition plans, where a company has one.
• Liability and penalties: The EU-level civil liability regime and mandatory conflict-of-law rules have been removed. Liability will instead be governed by national law, with administrative fines capped at 3% of net worldwide turnover.
• Delayed application: Member States will have until 26 July 2028 to transpose CS3D, with in-scope companies required to comply from 26 July 2029.

1. Next steps
2. With formal approval now secured from both the European Parliament and the Council, the Omnibus I amendments will proceed to publication in the Official Journal of the European Union and enter into force 20 days later. The Commission shall review the effectiveness of the CS3D implementation by 26 July 2031. 

For further background on the development of the of the CSRD and CS3D framework, please see our earlier commentary from May 2024 and February 2025.