European businesses have urged EU institutions to swiftly adopt the first so-called Omnibus package – a set of proposals by the European Commission aimed at simplifying the obligations of companies under the CSRD directive, which, among other things, concerns the assessment of business impact on the environment. However, experts emphasize that more time for implementation or the fact that fewer companies will be subject to regulations does not mean businesses can pause their preparations.
“Companies don’t know what to do in this situation, although the answer is simple: keep preparing,”
says Katarzyna Chwalbińska-Kusek, Partner and Head of ESG Advisory at Baker Tilly TPA, in an interview with Newseria.
“Just because we may have more time, or because the financial and employment thresholds might increase – resulting in fewer companies falling under the CSRD obligation – doesn’t mean the market won’t regulate itself. Every company is part of a value chain. If you’re in a chain with a company subject to CSRD, or even one that voluntarily reports, you’ll still need to understand your impacts, associated risks, and business opportunities.”
The Corporate Sustainability Reporting Directive (CSRD) requires companies to disclose information about their operations, environmental impact, and social activities. The goal is to ensure that businesses operate in a sustainable and responsible manner. In December 2024, the Polish parliament completed work on several laws implementing the CSRD. These regulations were originally scheduled to take effect on January 1, 2025, gradually extending to successive groups of companies.
At the end of February 2025, the European Commission announced the first administrative simplification package, called Omnibus I. It proposes a two-year delay in the requirement to report sustainability information for the second and third waves of entities, originally scheduled to report for the first time in 2025 or 2026. This affects large companies (other than public-interest entities) and listed small and medium-sized enterprises.
“This confusion early in the process isn’t helpful – and on top of that, we don’t yet know how the legislative situation in Europe will evolve. It will likely be uneven, as member states will have the option to set their own thresholds or stick to the current ones. This creates a lot of uncertainty and informational chaos for businesses, which could stall processes that have already begun,”
comments Chwalbińska-Kusek.
The European Commission intends to fast-track the Omnibus I package, while simultaneously starting discussions on the second package, which includes limiting the scope of companies required to report to only large entities with over 1,000 employees, revenue exceeding €50 million, or balance sheets over €25 million – as these firms have the greatest environmental and social impact. This could reduce the number of companies affected by the new rules by up to 80%. According to Poland’s Ministry of Finance, final decisions on implementing these changes will depend on the EU legislative process, including any amendments and approval by the EU Council and the European Parliament. The changes will also need to be implemented into national law.
Last week, BusinessEurope and the Lewiatan Confederation called for the swift adoption of the Omnibus package. At the same time, they stressed that the proposed rules do not reflect the needs of large companies. According to their statement, around 10,000 publicly listed European companies will still have to continue disclosing information for the next two years and will face even more stringent requirements starting next year.
“On the one hand, we can understand business’s desire to delay and reduce the requirements. On the other, there’s a serious lack of understanding in public discourse about what’s really at stake. What we’re discussing is a shift in the philosophy of doing business. Publicly available environmental data clearly show that business-as-usual is no longer viable,”
Chwalbińska-Kusek emphasizes.
“We must redefine how we operate in the current climate and market realities, because companies cannot afford to be unaware of their environmental and social impacts – not just because of dwindling natural resources, but due to other environmental and climate-related risks.”
Advisors point out that the new rules – though perceived as burdensome – can become a competitive advantage, both for companies and for Europe as a whole.
“It’s important to observe regulatory developments in other markets. The pressure toward decarbonization and sustainable development continues, and within this lies Europe’s potential competitive advantage,”
says Chwalbińska-Kusek.
“I’ve worked on sustainability for 18 years, and since 2007 I’ve supported companies that focused on it and collected sustainability data not because they were required to, but because they wanted to – they saw it as a competitive advantage. Based on these long-time reporters, we now see how sustainability data actually impacts competitiveness. So delaying or ignoring the issue won’t help anyone compete.”
She adds that many companies resist sustainability reporting because they simply aren’t prepared. Many businesses wait until the last moment, forced into action by legal requirements. However, collecting and reporting the necessary data within a single year can be extremely difficult.
