Omnibus and CSRD: Concepts, new standards, and thresholds

In February 2025, the European Commission launched its Omnibus package to simplify sustainability regulations. The package introduces new tools and terms – from “stop-the-clock” to “quick-fix” by ESRS – and has already changed the timeline for when companies need to report under CSRD. This article explains the key concepts, shows where the legislation stands in December 2025, and what companies need to do right now.

Concepts and key changes

• Omnibus package: comprehensive simplification proposals (February 2025)

• Stop-the-clock: timeline shift for waves 2 & 3

• Quick fix: relief for wave 1 companies

• Phase-in: gradual implementation of requirements

Stop-the-clock
The omnibus package is divided into two parts, the first of which, the so-called stop-the-clock directive, concerns postponing the start of reporting for companies in waves 2 and 3. This measure gives both the EU institutions and companies more time to deal with the major changes and simplifications that are now being developed in the CSRD regulations and ESRS standards.

On 26 November, the Swedish Parliament passed a stop-the-clock motion. For companies in waves 2 & 3, the introduction of CSRD reporting will be postponed by two years. This means that large unlisted companies and listed companies with fewer than 500 employees will not need to report until the financial year beginning after 31 December 2026, and listed small and medium-sized companies will not need to report until after 31 December 2027.

Quick fix: relief for wave 1 companies
While the Omnibus package extended the timetable for wave 2 and 3 companies, a separate solution was required for wave 1 companies, i.e. companies with more than 500 employees, which had already started reporting under the CSRD. Therefore, in July 2025, the Commission adopted a targeted "quick fix" to the first set of ESRS standards.

Quick-fix is aimed at companies that, according to the EU's timetable, began reporting under ESRS for the 2024 financial year. In Sweden, where CSRD came into force on 1 July 2024, this means that companies in wave 1 are covered by quick-fix from the 2025 financial year onwards, i.e. before their first reporting year. However, some Swedish companies have chosen to voluntarily report in accordance with ESRS as early as 2024.

The purpose of the quick fix is to avoid wave 1 companies having a disproportionate workload at the start of their reporting work and is based on the phase-in rules that already exist in the ESRS standards. According to the original requirements, companies that began reporting for the 2024 financial year would already need to include the disclosure requirements that were postponed in 2024 for 2025.

It is this escalation that Quick-Fix stops. The change allows wave 1 companies to postpone these disclosure requirements until after the 2026 financial year. This means that reporting can be kept at the same level as in the first year, and companies will have more time to develop processes, data quality and analytical capabilities before the more complex requirements come into force.

This means that the same relief now also applies to larger companies with more than 750 employees, something that was previously only intended for wave 1 companies with fewer than 750 employees.

In summary, the quick fix means that wave 1 companies will have a two-year grace period before all disclosure requirements in the ESRS standards need to be fully applied. The quick fix can be summarised as follows for wave 1 companies with more than 750 employees:

*Note that the dates in the table are based on the EU's original timeline. In Sweden, CSRD will not come into force until the 2025 financial year, which means that Swedish companies will be covered one year later than the EU date suggests, i.e. in 2026 and 2027.

However, if a topic covered by quick-fix is deemed material in the double materiality analysis, a brief description of the impact, risks and opportunities is required in accordance with ESRS 2 §17, even if full reporting is postponed. Full application is only required from the third reporting year onwards.

New thresholds for CSRD
In mid-November 2025, the European Parliament voted through a proposal to raise the thresholds for companies covered by CSRD. The new proposal represents a significant increase, with reporting requirements only applying to companies with more than 1,750 employees and an annual net turnover of €450 million.

Under current rules, reporting requirements apply to companies that meet at least two of the following three criteria: more than 250 employees, more than €40 million in net turnover and/or a balance sheet total of more than €20 million. The change means that around 80 percent of companies currently covered by the CSRD will fall outside the scope of the regulations, and that sustainability reporting will be concentrated among the largest groups in the EU.

Negotiations between the European Parliament, the Council and the Commission began on 18 November with the aim of finalising the legislation before the end of 2025. It is still unclear whether the proposal will be adopted in its current form, but the process signals a clear political will to significantly limit the scope of the CSRD.

Simplifications in the EU taxonomy 
As part of the Omnibus Package, the European Commission proposes several simplifications to the taxonomy. A new materiality threshold of 10 percent is being introduced, which means that companies only need to report activities that account for at least 10 per cent of turnover, capital expenditure or operating expenditure. In addition, simplified reporting templates are being introduced to reduce the administrative burden on companies. These will come into force on 1 January 2026, with effect from the 2025 financial year. The new reporting templates are available on the Commission's website here.

The delegated act on pollution prevention and control has also been updated to simplify the application of the criteria for not causing significant harm, particularly in relation to the use of chemicals. The changes are intended to reduce complexity and the administrative burden for companies reporting under the taxonomy.

Ongoing ESRS revision 
To make CSRD more manageable for companies, the EU is updating and simplifying the ESRS standards. The revision aims to reduce complexity, eliminate double reporting and make it easier for companies to apply the requirements in practice. On 31 July, EFRAG published drafts of the new standards, and stakeholders had until 29 September to submit their comments. EFRAG released the next draft of the simplification standards on 4 December 2025.

The new draft contains several significant simplifications. One of the most important features is that the ESRS will become more principle-based, with a greater focus on relevance and fair presentation rather than detailed compliance. This means, among other things, clearer guidance for materiality assessment, reduced documentation requirements and better adaptation to audit needs.

The narrative parts of the ESRS are also simplified. Companies are given greater freedom in how policies, measures and targets are presented, and the standards now place greater emphasis on describing how issues are handled, rather than following a strict template.

One of the most concrete changes is that the standards have become shorter, clearer and more transparent. EFRAG estimates that the amount of data points that companies need to report, provided they are material, will decrease by approximately 61 per cent. In addition, all voluntary disclosures have been removed.

The Commission will now issue a delegated act containing the updated standards, which will only enter into force after the European Parliament and the Council have completed their review and the act has been published in the Official Journal of the EU. Given this timeline, it is likely that the revised standards will not apply until spring 2026 at the earliest.

Remember to start early 
Implementing CSRD and reporting in accordance with ESRS is a comprehensive process that requires both strategic planning and operational structure. For companies in wave 1, much has already been done, but after the turn of the year, implementation will become more intense as documentation goes through quality assurance and gets refined to make it clear and easy to understand.

AVA Corporate Communications is a leading agency in financial communications, IR and sustainability reporting. We help listed companies navigate new regulations such as CSRD and Omnibus, from strategic frameworks and materiality analyses to structuring, writing, designing and producing complete sustainability reports.