EU Omnibus I Directive amending CSRD and CSDDD entered into force this week

The EU Omnibus I Directive ((EU) 2026/470), published in the Official Journal of the European Union on 26 February 2026, entered into force on 18 March 2026. The Directive introduces targeted simplification and scope‑narrowing measures to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).

CSRD: The Omnibus I Directive introduces the following key changes to the CSRD:

Significantly narrowed scope requirements. The revised thresholds now apply only to:

• EU undertakings/companies and non-EU issuers:
  • Undertakings with more than EUR450 million net turnover and an average of more than 1,000 employees; or
  • Parent undertakings of a group that during the financial year, and on a consolidated basis, exceed EUR450 million net turnover and had an average of more than 1,000 employees.
    
    
• Non-EU undertakings/companies: Non-EU undertakings are in scope when both of the following conditions are met:
  • An EU subsidiary or EU branch generated net turnover exceeding EUR200 million in the preceding financial year; and
  • The ultimate third-country parent undertaking, at a group level (or if not applicable, at an individual level), generated net turnover in the EU exceeding EUR450 million for each of the last two consecutive financial years.

Revised reporting deadlines:

• The reporting timelines under the CSRD have been adjusted. EU companies within scope are now required to report in 2028 using data from the financial year starting on or after 1 January 2027. The reporting deadline for non-EU ultimate parent entities remains unchanged, with reporting due in 2029 using data from the financial year starting on or after 1 January 2028. These changes build upon the "Stop the Clock" Directive (EU) 2025/794, which postponed the entry into application of CSRD reporting requirements by two years for large companies that had not yet started reporting (wave two and wave three companies), as well as for listed SMEs.

Other changes:

• Other changes include new flexibility around information disclosure, voluntary reporting standards for SMEs that act as a defined boundary to limit the information that reporting entities can request from SMEs or smaller value-chain actors, and changes to the European Sustainability Reporting Standards (ESRS).

CSDDD: The Omnibus I Directive introduces the following key changes to the CSDDD:

Significantly narrowed scope. The revised thresholds now apply to:

• EU companies/EU parent companies:
  • Companies which had more than EUR1.5 billion net worldwide turnover and on average more than 5,000 employees in the last financial year.
  • EU-based ultimate parent companies of a group which, on a consolidated basis, had more than EUR1.5 billion net worldwide turnover and on average more than 5,000 employees in the last financial year.
    
    
• Non-EU companies:
  • Non-EU companies where the company generated a net turnover exceeding EUR1.5 billion in the EU in the financial year preceding the last financial year.
  • Non-EU ultimate parent companies will be in scope where the group generated, on a consolidated basis, a net turnover exceeding EUR1.5 billion in the EU in the financial year preceding the last financial year.
    
    
• Franchisors and licensors: EU and Non-EU companies, or ultimate parent companies of a group, that entered into franchising or licensing agreements in the EU in return for royalties with independent third-party companies, where those agreements meet certain requirements, and where those royalties amounted to more than EUR75 million in the last financial year and the company or group had a net turnover of EUR275 million worldwide (for non-EU entities, only royalties and turnover generated in the EU should be considered).

Article 2(5) of the CSDDD provides that where a company meets the above thresholds, the CSDDD will only apply if those thresholds are met in two consecutive financial years. The CSDDD will also no longer apply to a company where the above thresholds cease to be met for each of the last two relevant financial years.

Other changes:

• Other changes include extended transposition deadlines, with Member States required to transpose the CSDDD by 26 July 2028, and changes coming into effect from 26 July 2029. Provisions implementing reporting requirements will apply for financial years starting on or after 1 January 2030. The Commission is required to make available general due diligence guidelines relating to the CSDDD by 26 July 2027. The due diligence requirements under the CSDDD have also been simplified.

 

Key takeaways for businesses

Now that the Omnibus I Directive has been published, businesses should consider the following as they assess its impact on their operations:

1. Reassess scope: Companies should assess whether they remain within the significantly narrowed thresholds for both the CSRD and the CSDDD, as many undertakings will no longer be captured by these regimes.
2. Review reporting timelines: Companies that remain in scope should take note of the revised reporting and application deadlines and adjust their compliance planning accordingly.
3. Monitor ESRS developments: The Commission’s forthcoming delegated act on simplified ESRS, expected within six months of the Directive’s entry into force, will have significant implications for sustainability reporting requirements.
4. Value‑chain considerations: Companies requesting sustainability information from their value chains should be aware of the new limitations on the information that can be sought from SMEs and smaller actors under the voluntary standards framework.
5. Due diligence review: Companies subject to the CSDDD should consider what updates may be required to their existing compliance and due diligence programmes.
6. Commission guidance: Businesses should monitor the publication of the Commission’s general due diligence guidelines, which are intended to assist with practical implementation of the revised CSDDD obligations.

 

Further Information

DLA Piper is closely monitoring developments in this area, including Member State transposition, and is available to assist clients in assessing the impact of the Omnibus I Directive and related measures on their businesses. Please contact your usual DLA Piper contact for further information.