CSRD Omnibus Impact: What Changes for Companies Under 1000 Employees

The European Commission Omnibus proposal significantly alters the CSRD landscape for mid-sized companies. We analyse the new thresholds, timelines and simplified requirements.

The Omnibus Proposal: Context and Motivation

In February 2025, the European Commission presented its long-anticipated Omnibus simplification package, a legislative proposal that amends several EU directives with the stated goal of reducing administrative burden and enhancing European competitiveness. Among the most significant changes are the amendments to the Corporate Sustainability Reporting Directive (CSRD).

The Omnibus proposal emerged from growing concerns across the European business community — particularly among SMEs and mid-sized companies — that the original CSRD timeline was too aggressive and the requirements too burdensome. Industry associations, national governments and even some European Parliament members called for a more proportionate approach, arguing that the compliance costs threatened to undermine the very competitiveness that the EU's Green Deal aimed to protect.

Key Changes for Companies Under 1,000 Employees

The Omnibus proposal introduces several critical changes that directly affect companies below the 1,000-employee threshold. These changes represent a fundamental shift in the scope and approach of European sustainability reporting.

1. New Threshold: The 1,000-Employee Line

The most significant change is the introduction of a clear dividing line at 1,000 employees:

Companies with 1,000+ employees: Subject to full ESRS reporting requirements, including double materiality assessment, comprehensive datapoints across all material ESRS topics, and mandatory external assurance.

Companies with 250-999 employees: Subject to new simplified reporting requirements that are significantly less demanding than the full ESRS. The exact scope of these simplified requirements is being developed by EFRAG, but the Commission has signalled a dramatic reduction in the number of mandatory datapoints.

Companies with fewer than 250 employees (non-listed): Not subject to CSRD, as was the case before the Omnibus. These companies can use the VSME standard voluntarily.

2. Timeline Delays

The Omnibus proposes a two-year delay for the second and third waves of CSRD reporting:

This delay gives companies valuable additional time to prepare, but it also creates uncertainty about the final requirements.

3. Simplified Requirements for Mid-Sized Companies

For companies between 250 and 999 employees, the Commission has mandated the development of a simplified reporting standard. While the final details are pending, the direction is clear:

• Fewer datapoints: A significant reduction from the approximately 800+ datapoints in the full ESRS
• Simplified materiality: A more streamlined materiality assessment process
• Reduced narrative requirements: Less detailed qualitative disclosure
• Proportionate assurance: Lighter assurance requirements, potentially limited to key metrics

4. Value Chain Reporting Relaxation

Perhaps the most impactful change for mid-sized companies is the relaxation of value chain reporting obligations. Under the original CSRD, companies were expected to collect and report detailed sustainability data from their supply chains. The Omnibus significantly scales back this requirement:

• Transition period: Value chain reporting obligations are delayed, with a clear signal that they may be permanently reduced
• Proportionality principle: Companies are expected to report value chain data only where reasonably accessible
• Safe harbour: Protection from liability for value chain data that is estimated rather than measured

This change has cascading effects for SMEs in the supply chain, reducing the pressure to provide detailed ESG data to their larger clients.

What This Means in Practice

For Companies with 250-999 Employees

If your company falls in this bracket, the Omnibus changes your situation significantly:

More time: You now have until 2028 to publish your first report (on 2027 data). Use this time wisely — build data collection processes, conduct materiality assessments and develop internal capabilities.

Lighter requirements: The simplified standard will be substantially less burdensome than the full ESRS. However, "simplified" does not mean "trivial". Expect meaningful reporting requirements covering key environmental, social and governance metrics.

Preparation is still essential: Two years may seem generous, but building robust sustainability reporting processes takes time. Companies that start now will be far better positioned than those who wait.

Consider voluntary reporting: Publishing a sustainability report before the mandatory deadline — using GRI or VSME — demonstrates proactive commitment and builds capability ahead of the requirement. CORE can guide you through this process at /servicos/sustentabilidade/relatorio-sustentabilidade-gri.

For Companies with Fewer Than 250 Employees

If you are below the CSRD threshold, the Omnibus confirms that you will not be directly required to report. However:

Indirect pressure remains: Your clients, particularly those in the 250+ employee bracket, will still need some supply chain data. The VSME standard remains the best vehicle for providing this information efficiently.

Market differentiation: Companies that report voluntarily stand out positively in procurement processes, financing applications and talent attraction.

Preparation for growth: If your company is growing and may eventually cross the 250-employee threshold, starting sustainability reporting early avoids a disruptive catch-up later.

See our VSME consulting services at /servicos/sustentabilidade/vsme.

For Companies Already Reporting (First Wave)

If you are in the first wave (large listed companies, >500 employees), the Omnibus does not change your obligations. You are already reporting on 2024 data and should continue with full ESRS compliance.

However, the Omnibus may bring some relief in future reporting cycles as EFRAG simplifies certain ESRS requirements. Monitor developments closely.

The Legislative Process: What Remains Uncertain

It is important to note that the Omnibus is a Commission proposal, not yet final legislation. The European Parliament and the Council of the EU must approve it, and amendments are likely during the legislative process. Key uncertainties include:

Timeline The two-year delay is likely to be maintained or even extended, as there is broad political support for more time. However, some MEPs have pushed for keeping the original timeline, arguing that delays undermine the EU's climate commitments.

Simplified standard details EFRAG is developing the simplified requirements for the 250-999 bracket, but the final standard is not expected until late 2026 or early 2027. Companies in this bracket face the challenge of preparing without knowing the exact requirements.

Value chain provisions The extent of value chain reporting relaxation remains subject to negotiation. Environmental groups and some member states are pushing to maintain stronger value chain requirements.

Opt-in provisions There may be provisions allowing companies below the thresholds to voluntarily opt in to CSRD reporting, gaining the credibility benefits of mandatory framework compliance.

Strategic Recommendations

1. Do not wait for certainty

The details will continue to evolve, but the direction is clear: sustainability reporting is here to stay for companies of all sizes. Start building capability now, even if the exact requirements are not finalised.

2. Adopt the VSME as a stepping stone

For companies in the 250-999 bracket, the VSME Comprehensive Module provides an excellent preparation pathway. Its datapoints are derived from the ESRS, so data collection processes built for VSME will directly transfer to simplified ESRS compliance.

3. Invest in data infrastructure

Regardless of the final requirements, you will need reliable ESG data. Invest in data collection processes, assign clear responsibilities and establish quality controls.

4. Engage your supply chain proactively

Even with relaxed value chain requirements, knowing your supply chain's ESG profile is strategically valuable. Start the conversation with key suppliers now.

5. Build internal competence

Train key staff on sustainability fundamentals, reporting frameworks and data management. Internal competence reduces dependence on external consultants and embeds sustainability in business operations.

6. Seek expert guidance

The regulatory landscape is complex and evolving. Working with experienced sustainability consultants like CORE can help you navigate uncertainty and build an efficient, future-proof approach.

CORE's Perspective

At CORE, we have been closely tracking the Omnibus process and advising clients on its implications. Our view is pragmatic: the Omnibus provides welcome relief for mid-sized companies, but it does not eliminate the need for sustainability action. Companies that use the additional time productively will be rewarded; those who use it as an excuse for inaction will face a more disruptive transition later.

We offer tailored support for companies in all size brackets, from VSME-based voluntary reporting for SMEs to full ESRS preparation for larger organisations. Our experience across Portugal and Mozambique gives us a unique perspective on how European regulation interacts with local business realities.

Contact us to discuss how the Omnibus affects your specific situation and what steps you should take now.

Conclusion

The CSRD Omnibus represents a significant recalibration of European sustainability reporting requirements, particularly for companies under 1,000 employees. More time, lighter requirements and relaxed value chain obligations provide breathing room — but the destination remains unchanged: transparent, comprehensive sustainability reporting will be expected of European businesses of all sizes.

The companies that thrive in this new environment will be those that start preparing today, building robust data processes, engaging stakeholders and integrating sustainability into their business strategy. The Omnibus gives you more time, but not more time to wait.