EU CSRD Omnibus Proposal: What It Means for Businesses

The implementation of the Corporate Sustainability Reporting Directive (CSRD) recently took a step back as the European Commission introduced a simplification proposal aimed at better aligning sustainability reporting with other EU policies, including the Corporate Sustainability Due Diligence Directive (CSDDD), the EU Taxonomy, and the Carbon Border Adjustment Mechanism (CBAM).

While this proposal is still in its early stages and will take time to go through the EU’s legislative process, the core principles of CSRD remain intact. Some revisions may be made before the proposal becomes law, but overall, the fundamental direction of sustainability reporting in Europe remains unchanged.

Minimal Impact for Large Corporations

Despite potential regulatory adjustments, the simplification proposal is unlikely to cause significant disruptions, especially for large corporations. Most major companies have been engaged in sustainability reporting for years, driven not by regulatory requirements but more so by stakeholder expectations. Investors, customers, and supply chain partners demand transparency on environmental and social impacts, making sustainability reporting a business necessity rather than just a compliance exercise.

For these large companies, CSRD alignment typically requires only minor refinements to existing sustainability reports, many of which are already underway. Additionally, international supply chains have long been working on impact assessments related to environmental sustainability and human rights, meaning the structural foundation for compliance is already in place.

Relief for Mid-Sized Companies (250-1000 Employees)

The biggest impact of the proposal is the reduced burden on mid-sized companies, those with 250 to 1,000 employees—which often do not have the internal resources, that will now have the option to report on a voluntary basis. Since CSRD primarily focuses on transparency rather than strict compliance with specific sustainability targets, these companies now face less pressure to produce “perfect” reports.

Instead, the emphasis shifts toward disclosure of current sustainability practices, allowing businesses to demonstrate progress over time rather than aiming for immediate full compliance. This flexibility is particularly valuable for companies that are still developing their sustainability strategies and reporting capabilities.

For these organizations, simply being able to produce an honest, transparent report on their status will meet stakeholder expectations. Customers, investors, and partners value transparency and continuous improvement over rigid adherence to predefined benchmarks.

Sustainability Reporting as a Continuous Improvement Process

“Sustainability reporting is not about reaching a final destination—it is a continuous improvement process. Each company must assess its own environmental and social impact and determine how to improve over time to become a better global citizen”, Says Per Linden, founder and CEO of Scandic Sourcing..

With this in mind, Scandic Sourcing has made it a priority to assist companies with voluntary reporting, particularly through the EU Voluntary SME Standard (VSME). This framework provides a structured yet flexible approach for mid-sized companies to begin their sustainability journey, ensuring transparency without excessive compliance burdens.

European Commission - Commission proposes to cut red tape and simplify business environment

For companies looking to navigate voluntary reporting effectively, Scandic Sourcing offers tailored support. To learn more, contact sourcing@scandicsourcing.com.