Omnibus I: EP formally adopts CSRD & CSDDD simplification directive

What’s new?

On 16 December 2025, the European Parliament (EP) formally approved the final text for the CSRD and CSDDD simplification directive under Omnibus I. This followed the provisional agreement reached with the Council of the EU on 9 December 2025 as part of trilogue negotiations.

What’s the background?

By way of background, this directive forms part of the Commission’s Omnibus I package, intended to simplify EU legislation relating to sustainability. For more information on the Omnibus I package, please see our client note here.

On 23 June and 13 November, the Council of the EU and the EP, respectively, reached their negotiating positions on the directive, setting the stage for trilogues to begin on 18 November 2025.

What does the final text say?

The key changes agreed by the EU institutions are as follows:

1. CSRD

Scope: applies to EU companies and non-EU issuers with more than 1,000 employees and EUR 450 million net turnover, as well as non-EU ultimate parent undertakings of a group with more than EUR 450 million net turnover generated in the EU and an EU subsidiary or branch with net turnover of more than EUR 200 million.

Reporting Requirements: reporting standards have been simplified and reduced, with fewer qualitative details required. Sector-specific reporting will be voluntary.

Value Chain Cap: smaller companies with fewer than 1,000 employees in the value chain may decline to provide to the reporting entity any information that exceeds what is specified under the voluntary standards.

2. CSDDD

Scope: applies to EU companies with more than 5,000 employees and EUR 1.5 billion net turnover, and non-EU companies with the same turnover generated in the EU, as well as EU and non-EU companies that entered into, or are the ultimate parent company of a group that entered into, franchising or licensing agreements in the EU with resulting royalties of more than EUR 75 million and have more than EUR 275 million net turnover generated in the EU.

Transition Plans: the requirement to adopt and put into effect a climate transition plan has been removed in its entirety.

Civil Liability: companies in breach of the directive will be held liable at the national, rather than EU, level and can be fined up to 3% of the company’s net worldwide turnover.

Transposition: the transposition deadline has been deferred by an additional year to 26 July 2028, with in-scope companies required to comply with the new requirements of CSDDD from 26 July 2029.

Next Steps

The final text will have to be formally approved by the Council of the EU before it is published in the Official Journal of the European Union.