The European Parliament has approved a provisional deal on the Omnibus I package that amends the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).

The changes in the CSRD require EU undertakings with an average workforce of more than 1,000 and net annual turnover of €450m ($523m) to conduct corporate sustainability reporting.

The changes also extend to non‑EU groups with revenue of more than €450m, and to their EU subsidiaries and branches where EU turnover exceeds €200m.

Listed small and medium-sized enterprises are removed from scope. The reporting model is streamlined, and sector-specific disclosures were made optional rather than mandatory.

Additionally, entities that do not fall within the scope are not required to provide information to larger parties within their supply chains beyond what is contained in voluntary reporting standards.

Businesses that were previously expected to report in the ‘Wave one’ phase but are now outside scope will not need to file for the 2025/26 financial year. The text also includes a review provision that leaves open the option of expanding the scope again later.

The revised CSDDD rules are limited to the largest companies, defined as those with more than 5,000 employees and turnover of at least €1.5bn.

The same turnover threshold is used for non‑EU companies operating in EU markets.

Due diligence obligations are refocused on critical risks, with a broader scoping approach replacing complete mapping.

Companies, which need to follow the CSDDD, should request information from smaller business partners only when it is necessary for a deeper assessment and cannot be obtained by other means. The requirement to produce climate transition plans is removed.

Penalties for breaches are capped at 3% of global turnover.

The rules are set to become effective on 26 July 2029, with 2028 designated as a transition year.

ICAEW Sustainability – Reporting and Assurance director Ravi Abeywardana said: “Companies preparing for both the CSRD and the International Sustainability Standards Board (ISSB) standards should adopt an approach to consider planning to disclose against both.

“For example, in the UK, we expect the UK Sustainability Reporting Standards (UK SRS) to be published in the coming months for voluntary use.

“We expect these to be aligned with the ISSB standards, so companies in scope of CSRD intending to also apply UK SRS should consider planning for how to prepare for both frameworks together, identifying areas of overlap without obscuring material information.”