It is almost exactly a year ago that sustainability teams across Europe started to panic. Large companies with more than 250 employees and at least €50 million in net turnover were trying to understand whether they were ready for the new EU sustainability reporting requirements or not. Consultants were flying in, booking out their calendars and building long waiting lists of companies desperately seeking help to become “CSRD‑compliant”. There was hardly a single day without a webinar, workshop or some other event insisting that CSRD would dominate 2025.
That is history now. The EU has backtracked on parts of the original approach and has significantly adjusted the directive through the Omnibus package and related amendments.
Yesterday, the European Parliament finally agreed on new thresholds for mandatory sustainability reporting. Under the latest political agreement, CSRD reporting will only be mandatory for companies with more than 1,000 employees and €450 million euros in turnover. This is a massive increase compared with the original CSRD scope, which started at 250 employees and much lower financial thresholds, and it removes many listed SMEs and other entities that were previously expected to fall under CSRD in the later “waves”.
As a result, a very large share of the companies that were originally preparing for CSRD will now no longer be in mandatory scope. In some segments, the revised thresholds even mean that fewer companies will be subject to the full regime than under the previous Non‑Financial Reporting Directive (NFRD), which applied to large public‑interest entities with more than 500 employees. At the same time, the EU is working with a simplified version of the ESRS standards for some reporters and has provided further relief and simplifications in the Omnibus context.
On top of that, there is the “Stop‑the‑Clock” directive. This amendment postpones the start of CSRD reporting for the second and third waves by two years: large companies that were supposed to start reporting in 2026 (on 2025 data) will now begin in the 2027 financial year with reporting in 2028, and listed SMEs and similar entities move from 2027/2028 to 2028/2029. Only the first wave – the very largest companies already covered by NFRD – still has to report in 2025 on 2024 data. In short: there will be less reporting, and it will start later than originally planned.
To be honest, the pressure twelve months ago was extremely high and the ambitions were huge. The big consultancies were hiring people at high speed to cover the expected demand, with very visible euro signs in their eyes. Adjustments and some simplification were probably necessary. But what is disappointing is that the EU has not just fine‑tuned the system – it has effectively made a U‑turn for a large part of the market. Ending up with fewer companies in scope than under NFRD in certain areas is clearly a step backwards.
All of this is happening at a time of escalating environmental crises and a geopolitical landscape that is moving in the opposite direction of long‑term sustainability. The EU has missed a major opportunity to secure a truly leading position as an economic area built around sustainable business models.
Maybe the term “sustainability” is a bit burned by now. But companies need to understand that today, “sustainability” is simply another word for “resilience”, “a robust business model” – or, more bluntly, “surviving in a changing environment” – and not just a marketing slogan about being “green”.