Omnibus Adopted: Corporate Sustainability Obligations Are Being Significantly Narrowed

On 24 February 2026, the Council of the European Union approved the final text of the legislative amendments under the so-called Omnibus package, which changes the rules for the CSRD and the CS3D, i.e. the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive. The adopted changes significantly narrow the scope of both CSRD and CS3D and reduce the administrative burden not only for companies directly subject to these regimes. This article briefly outlines the main changes introduced by the Omnibus package in this area.

Briefly on the substance of the CSRD and the CS3D

The CSRD Directive requires companies to regularly disclose information about the social and environmental risks they face and about how their activities affect people and the environment. In practice, this mainly includes information on sustainability strategy, established targets, adopted policies, implemented measures, risk management, and the concrete impacts of business activities.

By contrast, the CS3D Directive focuses on the actual functioning of a company and its value chain. It obliges the companies concerned to identify and address adverse impacts on human rights and the environment within their own operations, in their subsidiaries, and in relevant parts of their business partners’ value chains.

Put simply: CSRD is primarily about reporting, whereas CS3D is about due diligence and managing risks across the entire business value chain.

Changes relating to sustainability reporting

As regards the CSRD, the mandatory regime will now primarily remain applicable only to companies with more than 1,000 employees and net annual turnover exceeding EUR 450 million. When presenting the Omnibus package, the European Commission stated that this step should remove approximately 80% of undertakings originally falling within the regime. Sustainability reporting itself is also to be simplified: companies that remain subject to the rules will face eased reporting obligations under the revised European Sustainability Reporting Standards, in particular through a reduction in the range of information required to be disclosed.

However, the change will not only affect large companies originally falling under the CSRD regime; it will also have a significant impact on the position of suppliers and other businesses within value chains. Current practice has led large companies to request extensive ESG information from smaller business partners in order to meet their own regulatory obligations.

The Omnibus aims to limit this effect in two ways. On the one hand, it eases the burden on suppliers of companies that will newly fall outside the scope of the directive and will therefore no longer require this information for mandatory reporting purposes. More importantly, it introduces practical safeguards to protect businesses in value chains by establishing a voluntary standard for smaller companies. This standard is intended to serve as a protective framework, limiting the amount of information that companies can request from their suppliers.

Changes relating to sustainability due diligence

The CS3D is also being significantly amended. It will now apply only to companies with more than 5,000 employees and net annual turnover exceeding EUR 1.5 billion, meaning that it will cover a narrower group of the very largest undertakings. At the same time, the way in which due diligence is to be carried out is also changing. Under the adopted amendments, companies may focus, when identifying and assessing adverse impacts, on those business relationships in which actual or potential adverse impacts are most likely to occur. Where equally serious or equally likely risks appear in several areas, companies may prioritise the assessment of impacts concerning direct business partners. Companies will therefore no longer be required to rely on broad and detailed mapping of the entire chain when carrying out due diligence but may instead rely on reasonably available information and focus primarily on the areas presenting the highest risk. This should also reduce the volume of information that, in practice, they will seek from smaller business partners.

The Omnibus brings real relief for many companies. With fewer companies falling under the mandatory rules, the removal of sector‑specific standards, and limits on the information companies can demand from their suppliers, the administrative burden will drop in many cases. Sustainability won’t disappear from day‑to‑day business practice, but for much of the market it will now become more a matter of informal market expectations rather than broad, formal obligations.