The Corporate Sustainability Reporting Directive (CSRD) has quickly become one of the most significant developments in sustainability reporting globally. However, recent regulatory updates from the European Union—particularly the Omnibus Simplification Package—have reshaped the landscape.
These changes have created both relief and uncertainty for companies. While the scope of CSRD has narrowed and reporting requirements have been simplified, many organizations are now asking the same questions:
- Does CSRD still apply to us?
- If we fall out of scope, should we continue reporting?
- What standards should we follow moving forward?
During a recent webinar hosted by Inogen Alliance, sustainability experts discussed the new CSRD reality and what companies should focus on in 2026 and beyond. Below are the key takeaways.
Why CSRD Was Revised
When CSRD was first introduced, it significantly expanded the number of companies required to disclose sustainability information using the European Sustainability Reporting Standards (ESRS).
However, many organizations raised concerns about the complexity and administrative burden associated with implementation. In response, the European Commission introduced the Omnibus Simplification Package, designed to:
- Reduce regulatory burden on companies
- Improve EU competitiveness
- Streamline sustainability reporting frameworks
As a result, the scope of CSRD has been significantly reduced, and reporting requirements have been simplified.
New CSRD Scope: Who Must Report Now?
Under the revised rules, the threshold for companies required to report under CSRD has increased.
Companies must now meet both of the following criteria:
- €450 million or more in net revenue
- More than 1,000 employees
This simplified threshold now applies to both listed and non-listed companies.
Reporting Timeline
The implementation timeline also changed:
| Company Type |
First Reporting Year |
Report Published |
| Large listed companies already subject to CSRD |
FY2024 |
2025 |
| Large non-listed companies (>1000 employees) |
FY2027 |
2028 |
| Non-EU companies meeting revenue thresholds |
FY2028 |
2029 |
The Omnibus package also introduced a “stop-the-clock” delay, giving many companies additional time before reporting requirements begin.
Major Changes to the ESRS Reporting Standards
Along with narrowing the scope, regulators also introduced simplified ESRS standards (ESRS Set II).
The goal is to make sustainability reporting more practical and user-friendly.
Key Improvements
The revised standards include:
1. Simplified structure and language
Reporting standards have been rewritten to improve clarity and usability.
2. Fewer data points
Data disclosure requirements were reduced by approximately 60%, primarily by removing overlapping narrative requirements.
3. More flexibility for companies
Companies now have greater flexibility in determining how to disclose sustainability information.
4. Greater focus on decision-useful information
Instead of reporting everything possible, organizations must ensure their reports provide a “fair presentation” of sustainability performance.
This principle—borrowed from financial reporting—means companies must disclose information that is relevant and meaningful for stakeholders and investors.
What Has Not Changed
Despite these simplifications, several core elements of CSRD remain unchanged.
Metrics Are Still Required
Key sustainability metrics remain central to reporting, including:
- Greenhouse gas emissions (including Scope 3)
- Energy consumption
- Water usage
- Waste generation
- Workforce metrics
These metrics require robust data collection and management systems, which remain one of the most challenging aspects of implementation.
Double Materiality Remains Critical
The double materiality assessment (DMA) continues to be the foundation of CSRD reporting.
This process requires companies to assess:
- Impact materiality – how their operations affect the environment and society
- Financial materiality – how sustainability issues affect financial performance
Organizations must identify their material sustainability topics and disclose relevant data accordingly.
Increasingly, companies are integrating DMA results with enterprise risk management systems, aligning sustainability risks with broader corporate risk frameworks.
Assurance Requirements Still Apply
Companies subject to CSRD must still undergo limited assurance audits of their sustainability reports.
While earlier plans called for transitioning to more rigorous reasonable assurance, that requirement has been removed.
However, organizations should still expect detailed scrutiny of sustainability data and documentation.
What Happens If Your Company Falls Out of Scope?
One of the biggest impacts of the Omnibus package is that many companies previously preparing for CSRD are no longer required to report.
However, this does not mean sustainability reporting will disappear.
Companies may still choose to report voluntarily for several reasons:
- Customer requirements within supply chains
- Investor expectations
- Competitive positioning
- Access to sustainable finance
For these organizations, a new voluntary framework has emerged.
Voluntary Sustainability Reporting for SMEs
The European Financial Reporting Advisory Group (EFRAG) introduced the Voluntary Sustainability Standard for SMEs (VSME).
This framework is designed for companies that are not subject to CSRD but still need to provide sustainability information, especially within supply chains.
Key Features
The VSME framework includes:
- Around 100 data points, significantly fewer than ESRS
- No requirement for a double materiality assessment
- Simplified ESG metrics and disclosures
- Optional publication (reports can be shared privately with stakeholders)
The framework also supports companies supplying larger organizations that must report under CSRD.
Why Companies May Continue ESG Reporting Anyway
Even with regulatory relief, most companies are not abandoning sustainability reporting.
Global surveys consistently show that organizations see ESG reporting as valuable for:
- Risk management
- Investor relations
- Access to capital
- Brand reputation
- Supply chain transparency
In addition, sustainability reporting regulations continue to expand globally in regions such as:
- Canada
- Australia
- Japan
- China
- The United Kingdom
- The United States
As a result, many companies are continuing to build ESG reporting capabilities regardless of CSRD scope.
Practical Steps for Companies in 2026 for CSRD
Organizations navigating the new CSRD landscape should focus on the following priorities.
1. Determine Your Regulatory Scope
Confirm whether your organization falls within the updated CSRD thresholds or qualifies for voluntary reporting.
2. Strengthen Sustainability Data Systems
Reliable ESG data collection and documentation remain essential—especially for metrics related to emissions, energy, and workforce indicators.
3. Align Sustainability With Risk Management
Integrating sustainability risks into enterprise risk management systems can improve governance and reporting consistency.
4. Consider Voluntary Reporting
Companies outside CSRD scope may still benefit from adopting:
- VSME standards
- Simplified ESRS frameworks
- Other global sustainability reporting standards
5. Prepare for Ongoing Regulatory Evolution
Sustainability reporting frameworks are still evolving. Companies should monitor upcoming developments such as:
- Finalization of simplified ESRS standards
- Non-EU reporting standards (NESRS)
- Additional voluntary reporting frameworks
The Bottom Line
The Omnibus Simplification Package has changed the scope of CSRD—but it has not eliminated the importance of sustainability reporting.
Instead, the EU is moving toward a more focused, flexible approach that emphasizes meaningful sustainability insights over excessive disclosure.
For companies operating globally, the message remains clear:
Sustainability transparency is becoming a business expectation, not just a regulatory requirement.
Organizations that invest now in strong ESG data systems, governance processes, and reporting frameworks will be best positioned to navigate the evolving sustainability landscape.
If you would like support understanding how CSRD changes affect your organization—or how to implement voluntary ESG reporting frameworks—Inogen Alliance experts across our global network are ready to help.
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