Why Omnibus I matters
For three years, European companies have been building sustainability reporting programmes on the assumption that the CSRD would reach them. For most of them, it now will not. The Omnibus I Directive – published in the Official Journal on 26 February 2026 and in force since March 2026 – sharply narrows both the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).
The practical question for boards is no longer “how do we report?” but “are we still in scope, and what do our customers still expect from us anyway?”
What changed in the CSRD
The reporting scope is raised to companies with more than 1,000 employees and net turnover above €450 million. Both criteria must be met. The narrowed scope applies for financial years beginning on or after 1 January 2027.
For third-country groups, the requirements apply where the EU turnover of the parent exceeds €450 million and a subsidiary or branch generates turnover above €200 million.
The effect is dramatic: the large majority of companies previously drawn into CSRD – including most listed SMEs and most large-but-not-huge Swedish groups – fall outside mandatory reporting.
What changed in the CSDDD
Due diligence thresholds rise to roughly 5,000 employees and €1.5 billion turnover, cutting the population of in-scope companies by more than half. The EU-wide civil liability regime has been deleted – claimants may still sue, but under national law rather than a harmonised EU right. The obligation to adopt a climate transition plan has been removed, and the due diligence approach remains risk-based rather than requiring exhaustive mapping of the entire value chain.
Member states must transpose the CSDDD by 26 July 2028, with company compliance from 26 July 2029.
The trap: out of scope is not out of obligation
Falling out of the CSRD does not mean sustainability data stops being asked for. In-scope customers, banks and investors still need value-chain information, and they will get it contractually from suppliers who are themselves out of scope. The directive contains a value-chain cap intended to limit what large companies may demand from smaller suppliers, but commercial reality tends to outrun legal caps. Companies that dismantle their data collection entirely often have to rebuild it within a year – at a customer’s request rather than a regulator’s.
Practical example: a Swedish industrial group
A group with 1,400 employees and €300 million turnover was preparing its first CSRD report. Under the new thresholds it fails the turnover test and is out of scope. The correct response is not to cancel the project but to right-size it: keep the double materiality analysis and the emissions data that customers and lenders ask for, drop the full ESRS reporting build, and redeploy the budget. The company keeps the commercial benefit without the compliance cost.
Common mistakes companies make
The first is celebrating too early and deleting the programme, only to find that the largest customer’s procurement questionnaire has not changed. The second is assuming the thresholds are alternatives – for the CSRD, both the employee and the turnover test must be met, and getting that wrong in either direction is costly. The third is ignoring national transposition: Sweden must still implement the changes, and voluntary or listed-market expectations may sit above the legal floor.
Recommended actions
Re-run your scope assessment against the new thresholds, at group and subsidiary level, and document the conclusion. Ask your five largest customers what sustainability data they will require in 2027 regardless of the law. Then decide deliberately what to keep, what to pause and what to stop – in writing, at board level, so that the decision is defensible if expectations shift again.
Frequently asked questions
Do we still have to report for financial year 2026?
This depends on national transposition and on the wave your company was assigned to. Companies that were already reporting should confirm their position with their auditors rather than assume the obligation has simply vanished.
Can we report voluntarily?
Yes, and many companies will, using proportionate voluntary standards. Voluntary reporting is often the cheapest way to answer customer and bank questionnaires once rather than fifty times.
Does the removal of EU civil liability mean no litigation risk?
No. National tort law still applies, and courts in several member states have shown willingness to hear value-chain claims. The harmonised route is gone; the risk is not.
Is this the end of EU sustainability regulation?
No. It is a narrowing of who reports and how much, not a repeal. The underlying obligations on the largest companies remain, and sector rules such as the EUDR and the Batteries Regulation are unaffected.
Conclusion
Omnibus I is the largest single change to EU sustainability law since the CSRD was adopted. For most companies it is good news – but only if they take the trouble to re-scope deliberately rather than react. The winners will be the ones who cut the reporting they never needed while keeping the data their customers still ask for.
Lawgent helps companies re-assess CSRD and CSDDD scope after Omnibus I and right-size their sustainability compliance programmes. Get in touch for a scope review.
