The Omnibus Shake-Up. What Companies Must Do Now to Stay Ahead?

Madiha Mouchtak MBA. (March 2025)

The Omnibus proposal has significantly reshaped EU sustainability reporting, reducing mandatory obligations for a large portion of businesses. However, this does not mean companies can afford to ignore ESG compliance.
Regulators may be adjusting the rules, but banks, investors, and corporate clients still demand ESG data.

Today, impacted companies find themselves navigating one of two distinct realities:

1. Falling under the proposed 2-year temporary extention; meaning relief from mandatory reporting. This holds for the so called Wave 2 and Wave 3 companies.

2. Falling outside the CSRD scope. This holds for companies with fewer than 1,000 employees.

However, even within these two categories, one thing remains unclear: the timing. While the Omnibus proposal provides a framework, the legislative process is still underway. According to a conversation with Reuters (on March 4):
”The final decision on the 2-year extension may not come until summer, or even late 2025. And because CSRD has already been transposed into national law, companies must continue complying, until those laws are formally updated.
The revision of the ESRS is also a significant change—not a simple adjustment. It took over three years to draft the original standards, and with political resistance in some member states, delays and complexity are likely.
In other words: you may be in one of the two realities—but the timeline is still evolving.

This article explores how to respond to each of these two realities—based on the latest input from banks, investors, auditors, and regulators.

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Reality 1: Falling Under the Proposed 2-Year Extension – Should You Wait?

Wave 2 and 3 companies—those not reporting under CSRD, but still in scope—may receive a two-year delay under the Omnibus proposal. While this offers additional time to prepare, the delay is not yet confirmed, and importantly, it does not remove the need for action.

What the timeline actually looks like:
According to a conversation with Reuters (on March 4th):
The final decision on the 2-year extension may not come until summer or even late 2025, depending on negotiations with member states like Germany and France.
In the meantime, because CSRD has already been transposed into national law, companies must continue complying until official legal changes are enacted.

The revision of the European Sustainability Reporting Standards (ESRS) is also more complex than many expected. It’s a full rewrite, not a light amendment. The original standards took over three years to develop. Political headwinds in countries like France and Italy could lead to further delays, adding uncertainty around content, scope, and timing.
In short: you're in scope—and expected to comply—until proven otherwise.

What the market is saying:

KPMG (Mar 3):
"The proposed delay for wave II companies can be instrumental in creating time for proper preparation. However, businesses should not step back entirely, as investors, banks, and regulators will continue to expect sustainability transparency."

Verdantix (Mar 19):

• 52% of businesses plan to continue preparing for CSRD

• Approximately 25% are waiting to see what happens

• Approximately 25% intend to stop preparations altogether

This divide creates a clear competitive moment. The 52% that continue will likely set the bar for the rest of the market.

What you should do:

• Choose your technology and reporting partners early to avoid the rush and resource bottlenecks.

• Run and test your double materiality assessment now, while external expectations are still relatively low.

• Train your teams, select a reporting framework, and begin engaging suppliers and key stakeholders.

• Use this time to conduct a dry run of your CSRD reporting—identify gaps, improve data sourcing, automate where possible, and build in long-term efficiency gains.

Consider this:
If your competitors spend the next two years strengthening their ESG reporting and stakeholder relationships, where will that leave your business when you have only one year left before reporting becomes mandatory?

Reality 2: Falling Outside CSRD – What Now?

The Omnibus proposal removes the reporting obligation for companies with fewer than 1,000 employees. But removal from legal scope does not remove market expectations. In fact, the pressure may now increase—from investors, banks, corporates, and supply chain partners.

What the market is saying:

ABN AMRO (Feb 26):
"If this change is approved, banks, large companies, and investors will increasingly rely on voluntary reporting. Ultimately, there is a clear risk that these proposed changes will undermine the credibility of the data."

Eurosif (Feb 27):
Eurosif- the leading pan-European investors association- states: "Reducing the scope of sustainability reporting rules will limit investors' access to reliable sustainability data, impairing their ability to support industrial decarbonization and sustainable growth."

Financieel Management (Feb 27):
"Just as financial reporting is essential for understanding company performance, sustainability reporting is essential for understanding performance on environment, people, and governance."

What you should do:

• Voluntarily align with the CSRD requirements to remain compatible with the expectations of clients, banks, and investors.

• Start with a Double Materiality Assessment to define which ESG topics are most relevant to your operations and stakeholders.

• Focus on quantitative data—like emissions, energy use, water, waste, and workforce diversity- as these will remain central to ESG evaluation.

• Leverage AI-driven ESG software tools to streamline reporting, reduce reliance on external guidance, minimise manual effort, and keep compliance costs low. This is particularly beneficial for SMEs and mid-sized companies. These businesses will also benefit from the fact that they no longer require an audit—further increasing the affordability of their compliance efforts.

Consider this:
As part of your clients’ supply chains, your investors’ portfolios, and your bank’s loan book—how long will these stakeholders tolerate a lack of ESG data and transparency before it becomes a dealbreaker, knowing they are required to report under CSRD and transition their portfolios and operations toward Net Zero?

What Companies Must Do Now

Whether your company is facing a delay under CSRD or is expected to fall outside its legal scope, one thing is clear: the pressure for ESG transparency is only shifting—not disappearing. Banks, investors, and corporate clients will continue to expect ESG data—because they themselves are required to report under CSRD and transition their portfolios toward Net Zero. As a result, voluntary alignment is quickly becoming the market standard, even for businesses no longer legally obligated to comply.

Companies that delay may face higher costs later—especially if banks, investors, or corporates request sustainability certifications or data on short notice.
The most future-proof strategy is to act now. Here's what that looks like:

• Deploy AI-powered ESG software tools to streamline the process, reduce manual effort, cut costs, and increase accuracy.

• Start with a Double Materiality Assessment to identify which sustainability topics matter most to your business and stakeholders

• Use CSRD as your voluntary framework to ensure your disclosures are aligned with your clients’, investors’, and lenders’ expectations

• Report quantitative ESG indicators—such as emissions, workforce data, energy use, water, and waste—that will remain essential for credibility and comparability

And remember:
Opting out of CSRD does not mean opting out of ESG altogether. The Omnibus still enables larger corporates, financial institutions, and investors to request ESG data from their SME suppliers and business partners..

Final Thought: Stay Ahead of the Curve

Even if the Omnibus reduces reporting obligations, market expectations for ESG transparency remain—and are only accelerating. By taking action now—before legal, financial, or competitive pressure forces your hand—you gain control over your ESG narrative, reduce future compliance costs, and position your business to lead.
Companies that act early will be better positioned for:

• Access to funding and capital

• Greater investor trust and confidence

• Securing contracts with larger corporates

• Meeting future regulatory requirements with ease

In a rapidly shifting ESG landscape, standing still is falling behind.

Best practice? Start now—not just to comply, but to compete.

What’s Your Next Step?

How is your business responding to the Omnibus?
- Are you continuing with CSRD preparation despite the proposed changes?
- Are you using the extra time to get ahead—or holding off to see how things unfold?
- What’s standing in the way of starting voluntary ESG reporting?

Let’s open the conversation. I’d love to hear how your team is approaching this moment—and what opportunities or challenges you're navigating. Feel free to share your thoughts or get in touch.

Thank you for being part of this community. Your curiosity, engagement, and commitment to staying ahead in a fast-evolving regulatory landscape is what makes this space meaningful. Whether you're just beginning your ESG journey or already leading the way, I’m grateful to have you here—and excited to continue learning, sharing, and growing together.

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