On February 26, 2025, the European Commission introduced the Simplification Omnibus, an initiative aimed at reducing regulatory burdens to boost European business competitiveness. The proposal significantly weakens corporate sustainability reporting (CSRD) and due diligence (CSDDD) requirements, providing relief to businesses concerned about excessive compliance costs.
However, with regulatory uncertainty still looming, companies should hold off on major compliance investments until the final framework is confirmed.
Key Regulatory Changes
1. Corporate Sustainability Reporting Directive (CSRD) Adjustments
- Higher Reporting Thresholds: Companies with fewer than 1,000 employees will no longer be required to report under CSRD (previously, the threshold was 250 employees).
- Revenue & Asset Requirements: Companies must exceed €50 million in revenue or €25 million in assets to be subject to sustainability reporting.
- Impact: 80% of companies previously covered by CSRD will now be exempt.
Official Reference: European Commission Q&A on CSRD Simplification
2. Corporate Sustainability Due Diligence Directive (CSDDD) Revisions
- Extended Deadlines:
- Member states have until July 26, 2027, to transpose the directive into law.
- The first wave of companies will only be required to comply from July 26, 2028.
- Scope Reduction: Due diligence obligations will be limited to direct suppliers, removing the need for extensive supply chain audits.
- Official Reference: EU Commission Working Document on Omnibus Simplification
Next Steps: Key Timelines for Businesses
- March–December 2025: The proposal moves through the EU legislative process, requiring approval from the European Parliament and EU member states.
- January 2026: If approved, the new rules are officially adopted.
- 2028: New reporting requirements take effect.
Official Reference: European Commission Official Communication
Implications for Businesses: Why a Minimal Viable Compliance Approach Makes Sense
The uncertain regulatory landscape means businesses should avoid overinvesting in compliance structures that may be scaled back or further amended. Instead, a Minimal Viable Compliance (MVC) approach is the most strategic move.
Our Advice:
- Engage with Conformance for advice and updates
- Monitor the legislative process and be ready to adapt.
- Prepare only essential compliance structures instead of fully committing to long-term sustainability frameworks.
With the EU still debating these major regulatory shifts, companies should wait and see before making unnecessary investments in compliance.
For ongoing updates, follow the official European Commission documents: