The Sustainability Omnibus I Directive enters into force
The Omnibus I Directive (EU) on sustainability 2026/470 [1], published in the Official Journal of the EU on February 26, enters into force on March 18, 2026. The new Directive is limiting the scope of both the Corporate Sustainability Reporting Directive (CSRD)[2], the Corporate Sustainability Due Diligence Directive (CS3D)[3] and amending related Directives, including the EU Accounting Directive[4]
Sustainability reporting (CSRD)
- The obligation under the CSRD „to include in their management report information necessary to understand the undertaking’s impacts on sustainability matters, and information necessary to understand how sustainability matters affect the undertaking’s development, performance and position“ is limited to undertakings which, on their balance sheet dates, exceed a net turnover of EUR 450 000 000 and an average number of 1 000 employees during the financial year. For third-country companies, the net turnover threshold is raised to €450 million generated in the EU, with an additional threshold of €200 million for subsidiaries or branches.
- In case of consolidated reporting according to Art. 29a and Art. 40a Accounting Directive, financial holding undertakings with subsidiaries having business models and operations independent from one another are exempted from including consolidated sustainability information in their consolidated management report.
- Companies within the value chain that employ fewer than 1,000 people are considered “protected undertakings” and have the right to decline to provide information exceeding the information specified in the voluntary standards in response to a request made for the purpose of sustainability reporting as required by this Directive.
- In exceptional cases, and under prescribed conditions, parent undertakings may omit the information the disclosure of which would be seriously prejudicial to the commercial position of the group, which would be qualified as a trade secret as defined in Directive (EU) 2016/943, which involves classified information or compromises privacy or security.
- In order to facilitate voluntary reporting of sustainability information by undertakings which, on their balance sheet date, do not exceed an average number of 1 000 employees during the preceding financial year, and to limit the information that may be required for the purposes of this Directive from such undertakings in the value chain, the Commission is empowered to establish by means of delegated acts sustainability reporting standards for voluntary use.
Corporate sustainability due diligence (CS3D)
- Directive CS3D lays down rules on obligations for companies regarding actual and potential adverse human rights impacts and adverse environmental impacts, with respect to their own operations, the operations of their subsidiaries, and the operations carried out by their business partners in the chains of activities of those companies, as well as liability for violations of these obligations.
- The scope of this Directive is narrowed by increasing the corresponding thresholds for identifying companies that are subject to these obligations: the turnover threshold of EUR 450 000 000 is raised to EUR 1 500 000 000, and the threshold of 1 000 employees is raised to 5 000 employees. Accordingly, the thresholds regarding companies that have entered into franchising or licensing agreements are raised to EUR 75 000 000 with regard to royalties and EUR 275 000 000 with regard to turnover.
- The obligations for companies to adopt and put into effect a transition plan for climate change mitigation were removed.
- Member States are required to ensure the maximum limit of pecuniary penalties is set at 3 % of the net worldwide turnover of the company.
The transposition deadline for obligations related to CSRD is 19 March 2027, while the CS3D transposition deadline is set for 26 July 2028.
It is estimated that approximately 80% of companies have been taken out of the scope of CSRD and CS3D by this Directive.