When I first wrote about the EU putting the brakes on sustainability, the Omnibus package was still a proposal. The concern was not simply that deadlines might move. It was that a framework built to connect corporate decisions with environmental and social consequences could become another political negotiation between ambition, administrative burden, and competitiveness.
That negotiation has now produced a legal outcome.
Omnibus I has moved from proposal to law. The final text was published in February 2026 and entered into force on 18 March 2026. The question is therefore no longer whether the EU will simplify its sustainability rules. The more useful question is what the new framework expects from companies—and what good sustainability practice should look like when legal scope becomes narrower.
What changed
The revised rules significantly reduce the number of companies subject to mandatory reporting and due diligence.
Under the amended CSRD, mandatory sustainability reporting is focused on EU companies with more than 1,000 employees and net annual turnover above €450 million. The threshold for non-EU companies is also based on €450 million in EU turnover.
The revised CSDDD applies to much larger companies: more than 5,000 employees and net annual turnover above €1.5 billion. The obligation to adopt a climate-transition plan under the CSDDD was removed, while enforcement and liability remain primarily within national systems.
The reform also introduces a value-chain cap. Companies covered by the CSRD cannot demand unlimited sustainability information from smaller businesses in their value chains. For companies with 1,000 employees or fewer, information requests are meant to remain within the voluntary reporting standard.
This is a substantial shift. The EU has moved from a broad mandatory-reporting architecture toward a narrower regulated core supported by voluntary reporting for companies outside the main scope.
The standards are changing too
The legal thresholds are only one part of the reset.
On 3 July 2026, the European Commission adopted revised European Sustainability Reporting Standards and a voluntary reporting standard for smaller companies. The stated aim is to reduce administrative burden while retaining useful sustainability disclosures. The revised standards are subject to scrutiny by the European Parliament and the Council before they apply.
For companies, this creates an important distinction:
- The revised scope of the law determines who must report.
- The revised ESRS determine what in-scope companies report.
- The voluntary standard helps structure what smaller companies may reasonably be asked to provide.
Treating these as one question leads to confusion. A company can fall outside mandatory CSRD scope and still face sustainability requests from customers, banks, investors, insurers, or procurement teams. The difference is that those requests should become more proportionate and structured.
Did the EU abandon sustainability?
Not exactly. But it changed the mechanism.
The political emphasis has clearly shifted toward competitiveness, proportionality, and administrative simplification. Fewer companies will be legally required to produce full sustainability reports. Due-diligence duties will apply to a much smaller group. Some obligations have been removed entirely.
At the same time, double materiality, sustainability-risk information, value-chain awareness, and structured disclosure remain part of the European framework. The Commission has not removed sustainability reporting; it has concentrated mandatory reporting on larger companies and created a boundary around the information they can request from smaller suppliers.
The real risk is therefore not that sustainability disappears. It is that companies interpret reduced legal scope as permission to stop understanding their impacts, risks, dependencies, and transition needs.
Compliance may be narrower. Business exposure is not.
Energy prices, resource availability, climate risks, customer requirements, financing conditions, workforce expectations, and supply-chain disruption do not disappear when a reporting threshold changes.
What companies should do now
For companies that remain within CSRD scope, the priority is to confirm the revised legal perimeter, monitor national transposition, and prepare for the revised ESRS without rebuilding every reporting process from zero.
For companies outside mandatory scope, the sensible response is not to reproduce a full CSRD report voluntarily. It is to build a proportionate sustainability information base that can answer recurring questions without creating a new data bureaucracy.
A practical starting point is to:
- identify the sustainability matters that materially affect the business and its stakeholders;
- record the evidence already available across operations, finance, procurement, HR, and risk management;
- define a small set of decision-useful indicators;
- establish who owns each data point and how it is checked;
- use the voluntary standard as a boundary for value-chain information requests;
- document why priorities and trade-offs were chosen, not only the final metrics.
This is less dramatic than building a vast reporting programme. It is also more likely to survive changes in regulation.
A different role for sustainability professionals
The first phase of CSRD created demand for interpretation, data mapping, stakeholder engagement, double materiality, controls, and assurance readiness. Those capabilities still matter, but their purpose needs to become clearer.
The value of sustainability work should not be measured by the number of disclosures produced. It should be measured by whether the organisation can make better decisions, explain its priorities, respond to credible information requests, and recognise risks before they become expensive.
That means sustainability professionals need to work more closely with finance, operations, procurement, product teams, and strategy. The task is not simply to keep a reporting machine moving. It is to connect environmental and social information to the decisions the business already has to make.
Where this leaves us
The EU did hit the brakes. The final reform narrowed scope, delayed and removed obligations, and placed competitiveness at the centre of the policy discussion.
But braking is not the same as reversing.
The 2026 framework still expects the largest companies to report, still protects the principle of double materiality, and still recognises that sustainability information moves through value chains. What has changed is the scale, the boundary, and the burden considered acceptable.
The opportunity now is to build a better loop: fewer unnecessary data requests, clearer ownership, proportionate evidence, and sustainability information that helps people decide—not merely disclose.