Omnibus is moving forward – what do the summer 2025 updates reveal about the direction of sustainability reporting?

The draft versions of the ESRS standards published in July 2025 promise significant simplifications to the sustainability reporting requirements under the CSRD. Over the summer, relief has also been provided to first-wave reporters in the form of “quick-fix” amendments, EU taxonomy reporting obligations have been eased, and the VSME standard aimed at small and micro-enterprises has been highlighted in the European Commission’s news feed.

Why are these measures needed?

The CSRD Directive, which came into force in 2024, expanded statutory sustainability reporting to tens of thousands of European companies. However, many companies have found the reporting requirements burdensome in a situation where the EU’s regulatory burden has grown rapidly across several areas.

The Commission responded to this feedback in February 2025 by proposing the so-called Simplification Omnibus package, which includes amendments to the CSRD as well. The underlying rationale is the need to reduce the administrative burden, increase regulatory predictability, and improve Europe’s competitiveness. At the same time, the scope of the directive is being narrowed, and for many companies, the directive’s reporting obligations may be eliminated.

However, the need for corporate responsibility communication and sustainability reporting will not disappear. The drafts issued over the summer and the delegated acts adopted by the Commission clarify the direction of the regulation.

Key changes in a nutshell

1. “Quick-fix”: relief for first-wave reporters

In July 2025, the European Commission approved the so-called “quick-fix” amendments to the ESRS standards. The changes are intended to reduce the burden on first-wave reporters (those who have already reported for the 2024 financial year in accordance with the CSRD) and provide certainty regarding reporting obligations for 2025. This was necessary because these companies were not covered by the “stop-the-clock” directive, which delayed the sustainability reporting requirements for “wave two” and “wave three” companies by two years.

The “quick-fix” allows for the omission of certain data points (such as projected economic impacts) for the years 2025 and 2026. As a result, first-wave reporters are not required to report on the new data points in their 2025 sustainability reports. Additionally, companies employing more than 750 people can now benefit from most of the same relief measures as companies employing fewer than 750 people.

The delegated act has been approved by the Commission but will not enter into force until it is published in the Official Journal of the EU (OJ).

2. Updated ESRS draft standards: greater flexibility and clarity

On July 31, 2025, EFRAG published drafts of updated ESRS standards and launched a 60-day public consultation. This is a technical update aimed at both clarifying reporting and reducing disclosure requirements. In addition to the draft standards, EFRAG published an application guide and additional documentation to track the changes.

With these changes, EFRAG has simplified the double materiality assessment (DMA), reduced overlap in the standards, clarified the language and structure, and removed all voluntary disclosure requirements. Efforts have been made to improve the readability of the standards, for example, by placing application requirements in the context of the relevant disclosure requirement.

Overall, the number of mandatory data points (reported if material) has decreased by 57%, and the total volume of all reportable data (mandatory and voluntary) has dropped by 68%. At the same time, narrative data points have been significantly reduced. In addition, the application of the minimum disclosure requirements (MDRs) regarding policies, actions, targets, and metrics presented in ESRS2 has been clarified in the context of topic-specific standards.

The update of the reporting standards will continue based on feedback received during the public consultation. EFRAG is scheduled to submit the final versions of the standards to the European Commission by November 30, 2025.

3. VSME Recommendation: a voluntary reporting framework for SMEs

At the end of July 2025, the European Commission issued a recommendation on the use of the voluntary VSME standard for small and medium-sized enterprises that are not covered by the CSRD. This standard makes it easier for SMEs to respond to requests for sustainability information from larger companies in their value chain. The Commission therefore urges larger actors to base their information requests within their value chains on the reporting limits set by VSME as far as possible. This is not a binding standard, but a Commission recommendation that SMEs can utilise, for example, as part of their customer or investor communications.

4. Updates to EU Taxonomy reporting: technical clarifications and application guidelines

In July 2025, the European Commission adopted a delegated act streamlining the EU Taxonomy’s reporting requirements and thereby reducing the administrative burden on reporters.

The regulation introduces a new materiality principle for the EU Taxonomy (for key figures on reportable revenue, capital expenditures, and operating expenses), simplifications to the “insignificant harm” criteria related to environmental pollution, new simplified reporting templates, and changes to the key figures reported by financial sector companies.

The delegated act will apply starting with the 2025 reporting year, but reporting companies may choose to apply the current guidelines for the current year, 2025. The act is currently under consideration by the European Parliament and the Council and will not enter into force until it has been published in the Official Journal of the EU.

What happens next?

We eagerly await the final form of the ESRS standards, but based on the drafts, the direction is already clear – the focus is on what matters most.

As one of our clients said, buses come and go, but the importance of sustainability work isn’t going anywhere. The importance of strategic sustainability communication is emphasised, as stakeholders’ expectations regarding sustainability remain – the market rewards those who dare to report on their operations openly and transparently.

Now is a good time to assess your position in the market and review the resilience of your sustainability strategy in the face of the challenges of the coming years. The IR Partners team will assist your company in all stages of sustainability communication: from interpreting obligations to strategic communication and putting reporting into practice.

Get in touch – let’s work together to find the best approach for you!