EU Omnibus package defers CSRD reporting and narrows disclosure scope

The European Commission's February 2025 Omnibus package defers CSRD reporting by two years to 2028 and proposes excluding 80% of currently covered entities. The reforms reshape EU sustainability disclosure obligations that Indian exporters and subsidiaries within EU value chains must track for compliance planning.

The February 2025 Omnibus package introduces a "stop the clock" measure deferring CSRD obligations by two years, moving initial compliance from 2026-2027 to 2028; this delay, approved by the European Parliament and Council, must be transposed nationally by end-2025. A separate "content" proposal would exclude 80% of covered entities, focusing on companies with over 1,000 employees, and make taxonomy reporting voluntary for firms with turnover below €450 million.

Large EU companies, SMEs in value chains, and financial-sector reporters are directly affected. EFRAG must submit revised European Sustainability Reporting Standards by 31 October 2025, with an interim "quick fix" ensuring FY2024 reporters face no added requirements for 2025 and 2026. The Commission is advancing a voluntary SME reporting standard to curb excessive data requests on small suppliers from CSRD-compliant firms operating within complex value chains.

Companies should monitor EU Taxonomy amendments simplifying templates and exempting activities below 10% of turnover, with final adoption scheduled for June 2025 and a broader screening-criteria update, including the "do no significant harm" test, planned for 2026 from reporting year 2027. SFDR revisions are expected in Q4 2025 to address usability and greenwashing. Indian suppliers to EU firms should reassess which disclosure obligations now apply.

Key figure — CSRD reporting deferral: two years, moving initial compliance to 2028