Key takeaways
The EU Parliament issues final vote on the amendments to CSRD and CSDDD
On 16 December, the EU Parliament's plenary voted to approve the Draft Directive amending the CSRD and CSDDD. Following Council's formal approval (which is expected to be certain and swift given recent communications to the EU Parliament), the text will be sent for publication in the Official Journal and will enter into force twenty days after publication. This officially marks the end of the line for the sustainability Omnibus.
Please click here to find a detailed breakdown of key changes to CSRD and CSDDD.
EFRAG5 delivers the revised ESRS
A key proposal envisaged in the Omnibus was the simplification and streamlining of sustainability reporting through a revision of the ESRS. On 3 December, EFRAG released a draft of revised and simplified ESRS (see our summary of key changes here). The Commission will now move to adopt a draft Delegated Act amending the ESRS based on EFRAG's advice. The EU Commission is expected to launch another public consultation in early 2026 during which stakeholders can provide feedback on such draft Delegated Act. Once the EU Commission has adopted the Delegated Act, the EU Parliament and Council will have the opportunity to scrutinise the Delegates Act and provide any objections. The revised ESRS will apply to EU businesses in scope for mandatory reporting under the CSRD.
Given the significant reduction of thresholds, a large number of businesses is likely to fall outside scope of CSRD reporting. This may create unintended complexities, as businesses may still want to report sustainability data voluntarily or may be requested sustainability data by stakeholders on the basis of different standards. To bridge this gap and minimise complexity, businesses falling outside scope of CSRD will have the option to apply the "sustainability reporting standards for voluntary use", which are still to be adopted by the EU Commission through Delegated Act. Until such Delegated Act is adopted, the Commission recommends reporting in line with Commission Recommendation 2025/1710, which is based on the Voluntary Standard for Micro and Small Enterprises (VSME) developed by EFRAG.
EU Taxonomy
Changes to the Taxonomy have unfolded separate from, but connected with, the Omnibus Directive. The Delegated Act amending the Taxonomy Disclosures, Climate and Environmental Delegated Acts (see our summary of proposed changes here and here) was adopted in July 2025, but have not yet entered into force (this is expected for early 2026), although the simplified rules are expected to enter into application as from 1 January 2026 for FY 2025. On 17 December, the EU Commission issued a Taxonomy Reporting guidance to help businesses in scope preparing for the simplified disclosures adopted in July 2025.
EU Deforestation Regulation
On 17 December 2025, the EU Parliament plenary voted to approve the targeted simplifications and application delays to the EUDR, as agreed with EU Member States on 4 December 2025 (see our summary of proposed changes here). By 30 April 2026, the Commission must present a report following an assessment of the law's impact and administrative burden. The revised EUDR text needs to be endorsed by Council and published in the EU's Official Journal before the end of 2025 for the changes to enter into force.
Next steps
With the dawn of legal certainty finally upon us, it is possible to start considering next steps. Our immediate recommendations would be as follows:
- Reassess scoping for EU entities and non-EU parent based on new thresholds to confirm obligations/ timeline for CSRD and CSDDD
- Create/ update ESG compliance roadmap to consider, inter alia:
- Updated timeline and compliance obligations for CSRD, EU Taxonomy and CSDDD
- Impact on double materiality assessment (DMA)
For more information, please contact our team of experts.
1 Corporate Sustainability Reporting Directive
2 European Sustainability Reporting Standards
3 Corporate Sustainability Due Diligence Directive
4 EU Deforestation Regulation
5 European Financial Reporting Advisory Group
