The rules of sustainability reporting in Europe may be shifting, but the business case for transparency remains as strong as ever. In early 2025, the European Commission introduced the EU Omnibus proposal – a sweeping set of revisions that could delay and narrow the scope of the Corporate Sustainability Reporting Directive (CSRD), along with other key sustainability and corporate reporting initiatives.
For many companies, especially those with cross-border operations, these proposed changes raise a new set of questions: Should you pause your reporting efforts or stay the course? How do you weigh evolving regulatory timelines against long-term environmental, social, and governance (ESG) strategy?
In this post, we’ll explore the potential impacts of the Omnibus proposal, what it means for CSRD reporting, and how companies can move forward with confidence, even amid uncertainty.
The EU Omnibus Proposal Explained: What’s Changing for CSRD Reporting?
In February 2025, the European Commission introduced the Omnibus Simplification Package. This proposal includes significant amendments to the Corporate Sustainability Reporting Directive (CSRD), affecting reporting timelines and the scope of companies required to comply.
Timeline and scope modifications
The proposal recommends a two-year postponement for companies in the second and third waves of CSRD implementation. Companies originally scheduled to report in 2026 and 2027 would now have until 2028 and 2029, respectively.
The scope would also narrow. Previously, companies meeting or exceeding two of the following three thresholds were in scope: 250 employees, €50 million in net turnover, or €25 million on the balance sheet. Under the revised proposal, only companies with more than 1,000 employees that also meet or exceed either the turnover or balance sheet thresholds would be required to report—potentially exempting around 80% of previously covered entities.
Current status and approval process
The proposal is currently under review by the European Parliament and the Council of the European Union, with potential amendments expected before final approval.
Until then, existing CSRD obligations remain in effect. Companies, including U.S.-based firms with European subsidiaries, should continue tracking developments closely and maintain readiness in jurisdictions where national transpositions are already underway.
Strategic Implications: To Report or Not to Report?
With CSRD’s future scope and timing still under review, many organizations are asking whether to continue investing in reporting or slow down. While the Omnibus proposal may reduce immediate obligations, it introduces new strategic considerations.
Halting efforts might reduce near-term costs, but it also risks losing ground on ESG credibility, investor readiness, and risk management. For U.S. companies with a European presence, the ability to communicate sustainability performance is quickly becoming a business imperative—regardless of regulation.
In this environment, understanding your company’s risk profile and forward posture is critical.
Risk assessment for different company profiles
- Large companies – those with over 1,000 employees and significant EU operations – are unlikely to fall outside CSRD’s scope, even under the revised criteria.
- Medium-sized enterprises may be exempt, but could still face supply chain and customer pressure to provide ESG data.
- International companies must navigate a growing patchwork of global reporting requirements, from the EU to California to Australia and beyond.
- U.S. parent companies with EU subsidiaries should anticipate divergence between U.S. and EU requirements, and proactively align internal systems.
- Suppliers to in-scope organizations may be required to provide sustainability data, regardless of their own legal standing.
The cost-benefit analysis of voluntary reporting
Even without a mandate, ESG reporting delivers tangible business value. Upfront investment in systems and data can yield long-term benefits in transparency, risk mitigation, and trust.
Companies that stay the course may gain an edge through market differentiation, especially in ESG-sensitive sectors like finance, manufacturing, and consumer goods. Investor expectations continue to rise, with or without regulation.
Early alignment with CSRD and the broad reaching European Sustainability Reporting Standards (ESRS) can also ease future compliance as reporting standards continue to evolve globally. A proactive approach today can reduce costs and complexity tomorrow.
Voluntary Reporting Framework: A Viable Alternative?
A central feature of the Omnibus proposal is the introduction of a voluntary sustainability reporting framework for companies no longer in scope. For resource-constrained organizations, this might seem like a welcome reprieve. But a lighter-touch approach can come at the expense of rigor, consistency, and stakeholder confidence.
Voluntary frameworks do not eliminate the need for ESG disclosure; they simply shift the responsibility for defining scope, depth, and format back to the company. For U.S. firms navigating multiple standards, this adds both flexibility and complexity.
Understanding the VSME framework limitations
The proposed Voluntary Small and Medium-sized Enterprises (VSME) framework offers simplified, checklist-style reporting. But this structure limits depth, especially around social and governance topics, making it harder to understand material risks related to labor, supply chains, and oversight.
Data comparability and consistency may also suffer, challenging investors and partners seeking reliable benchmarks. And because the VSME framework may not align well with emerging U.S. or global standards, companies that adopt it could face future rework.
Bridging the gap between voluntary and mandatory reporting
Still, voluntary reporting can be a useful steppingstone, if approached strategically. Companies can build scalable systems by focusing on core ESG metrics, maintaining high data quality, and aligning with common ESG framework principles where possible.
Double materiality assessments – examining both financial impact and societal outcomes – can future-proof reporting practices and prepare companies for evolving regulations. Ultimately, the most resilient businesses won’t view voluntary reporting as an opt-out, but as a chance to opt-in on their own terms.
Beyond Compliance: The Business Case for Sustainability Reporting
Sustainability reporting helps companies identify and manage risk, strengthen operational oversight, and build transparency into how they do business.
For U.S. organizations operating globally, ESG disclosure also serves as a bridge connecting different jurisdictions and stakeholder expectations through a common language of performance and accountability.
Perhaps most importantly, it allows companies to lead with transparency in a time when visibility is critical to trust.
Tangible business benefits
Reporting can help expose potential risks and blind spots, while also identifying opportunities to cut waste, reduce inefficiencies and lower operational costs.
It can also improve access to capital, as investors reward clear, consistent ESG disclosures. During periods of market disruption or regulatory change, robust reporting strengthens reputation and stakeholder confidence.
For U.S. companies with European operations or clients, it opens doors, simplifying partnerships and reinforcing alignment with global value chains.
Meeting evolving market expectations
ESG expectations are growing from every angle:
- Investors want comparable, useful decision-making data.
- Customers seek responsible and transparent partners.
- Top talent (especially younger professionals) are drawn to purpose-driven employers.
Sustainability reporting also enhances supply chain resilience by offering visibility into ESG risks and dependencies. As U.S. climate disclosure regulations develop, reporting will become less of a differentiator and more of a baseline.
Practical Preparation: Building Adaptable Reporting Systems
As ESG disclosure requirements evolve, companies have an opportunity to invest in systems that are not just compliant but resilient. Rather than reacting to each regulatory shift, customer survey, or investor inquiry, organizations can create a foundation that supports flexibility, comparability, and continuous improvement.
This is especially critical for U.S. companies operating across multiple jurisdictions. Aligning with the CSRD, and frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD) and the International Sustainability Standards Board (ISSB), requires systems that are nimble and consistent. The strongest reporting programs aren’t designed for one rule; they’re built to grow and adapt with the business.
Efficient data collection and management
Laying the groundwork for agile reporting starts with how your data is gathered, organized, and maintained. A strong data infrastructure is the backbone of any sustainability reporting program, especially one expected to flex with evolving standards and stakeholder expectations.
- Centralize sustainability data infrastructure to ensure consistency across business units and regions.
- Automate data collection where possible to reduce manual input and minimize errors.
- Maintain audit-ready documentation to streamline internal reviews and external assurance.
- Design scalable systems that can accommodate new KPIs, shifting materiality thresholds, or additional disclosure requirements.
Future-proofing your sustainability strategy
A future-ready ESG program aligns with evolving expectations while staying grounded in what matters most to your business and stakeholders.
- Focus on ESG topics that reflect your core risks and opportunities.
- Build internal capacity through training, governance, and clearly defined roles.
- Leverage technology to reduce reporting burdens and improve accuracy.
- Monitor new global regulatory developments so you can stay ready, not reactive.
Making Informed Decisions in an Evolving Regulatory World
The proposed changes to CSRD may delay timelines and reduce obligations, but they do not diminish the strategic value of ESG reporting. Transparent reporting continues to support informed decision-making and builds lasting credibility – regardless of whether it’s required or voluntary.
As companies assess their next steps, it’s critical to apply a double materiality lens—considering not only how sustainability issues impact the business financially, but also how the business impacts people and the environment. This dual perspective is foundational to the CSRD and increasingly reflected in global stakeholder expectations.
For global companies, this is an opportunity to reassess and reaffirm long-term priorities.
Antea Group can help you navigate what’s next. Explore our sustainability reporting services.
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