CSRD 2.0: Suddenly out of scope? Here’s what you still need to think about.

Galina Parmenter
Apr 3
4 min read

Updated: Apr 13

About the author

Galina Parmenter has 14+ years of experience working with companies, policymakers, and other stakeholders in multiple industries such as fashion, telecommunications and automotive. She was part of the Global Sustainability Team at C&A. Afterwards she became an ESG Senior Advisor at Yettel.

The Omnibus vote by the European Parliament in December marked a turning point for sustainability legislation in the EU. It showed a shift from the gradual expansion of regulations towards simplification in an attempt to boost competitiveness.

The CSRD (Corporate Sustainability Reporting Directive) is a centrepiece of the European Green Deal initiatives adopted in 2022, mandating corporate reporting on sustainability. It defines who reports, when, how and on what topics.

To comply with this, a separate piece of documentation, the ESRS (European Sustainability Reporting Standards), which outlines the specific technical data points required for reporting, once a company has established its topics of importance following a double materiality assessment. We have prepared a separate blog post on the changes to the ESRS under Omnibus - feel free to check it out.

What does Omnibus mean in practice?

The Omnibus is a package of measures aimed at reducing regulatory burdens associated with sustainability reporting requirements, through the simplification of the CSRD, the associated ESRS, the CSDDD and the EU Taxonomy.

Smaller Scope

One major shift brought on by the Omnibus is the drastically reduced scope of the number of companies that are required to report. The number has fallen by 90% in comparison to the original CSRD, with roughly 41,700 companies (Rasche et al., 2025) no longer required to publish sustainability reports. Below you can find the updated scope details and what they mean for Wave 1, Wave 2 and SME companies as defined under the original CSRD.

Omnibus - new scope	Application date
EU companies with: More than EUR 450m net turnover and; More than 1,000 employees on average during the FY.	Reporting in 2028 for the FY starting on or after January 1, 2027
Non-EU parent companies with: More than EUR450m net turnover generated in the EU for each of the last 2 consecutive FY; An EU subsidiary with more than EUR 200m net turnover in the preceding FY; No specific employee threshold.	Reporting in 2029 for the FY starting on or after January 1, 2028

Wave 1 companies remain in scope but can continue to use the 2023 ESRS up to FY26. They could also opt-in early to the revised ESRS for FY26, which becomes mandatory for FY27.
Wave 2 companies will now report for FY27 in 2028, instead of reporting FY26 in 2027. They can voluntarily opt-in to use the updated ESRS for FY26 in 2027. For FY27, the revised ESRS will be mandatory.
Listed SMEs are entirely removed from the mandatory scope. Instead, they are encouraged to utilise the voluntary standard for non-listed micro-, small- and medium-sized undertakings (VSME), specifically designed for SMEs.

Other Amendments

Value Chain Cap

The cap sets a legal upper limit on sustainability information that reporting companies can request from medium and small-sized enterprises. This means that companies with ≤1,000 employees can refuse information requests beyond what is included in the VSME standard, unless the information required is ‘commonly shared in the industry’. In addition, requests for more extensive information via contractual provisions are not permitted.

Assurance

Assurance now requires only one qualified ‘key sustainability partner’ per assurance firm, with limited assurance standards to be adopted by July 2027, fully replacing reasonable assurance. Third‑country assurance providers now get simplified registration until 2030.

Digitalisation

Reports will eventually be required to be submitted in the standardised electronic format (XBRL). However, until detailed tagging rules are finalised (a draft is expected in 2027), companies do not need to tag sustainability information. Furthermore, the Commission will create an online portal to support with this and other compliance elements – with digital tools, templates, guidance and support.

Why it’s best to remain focused – instead of relaxing

The Omnibus has not changed the EU’s long-term commitment to sustainability, and it does not discredit the very real potential of more stringent legislative requirements in the future.

Many stakeholders will still put pressure on companies to be transparent. Consumers expect honesty and ethics, investors are increasingly looking at ESG metrics to manage risk, and clients and partners value clear communication. For those reasons, it is important for companies to use this delay to strengthen their data collection systems, and governance policies, and engage with their supply chain partners.

To send a clear signal to investors, consumers and stakeholders, out-of-scope companies are encouraged to voluntarily report by choosing a clear pathway:

The revised ESRS
The VSME guidance
An international reporting framework, such as the GRI

Outlined below are some of the benefits and drawbacks of these potential pathways:

	Benefits (+)	Drawbacks (-)
ESRS	High credibility in Europe - particularly among investors Demonstrates leadership Alignment with future requirements Potential to influence industry best practices	Risk of misinterpretation or compliance gaps due to evolving guidance Significant internal resources and training required
VSME	Simplified framework tailored for VSMEs Good foundation on reporting material policies, actions and targets	Covers only basic requirements Will not fully capture a company's full sustainability journey
GRI	Globally recognised and widely adopted standard Communicates sustainability progress to stakeholders Fulfilment of standard reporting requirments is based on materiality, like ESRS	Strict requirements No simplified pathway for smaller companies

Next steps

Regardless of which pathway you are considering, sustainability reporting is expected to stay at the forefront of stakeholder expectations.

While the reduction in scope and reporting burden offers breathing space for many companies, this is not a signal to pause reporting efforts.

This time should be used to better prepare for legislation and increasing expectations.

Most importantly, for companies out of scope, voluntary alignment with frameworks such as the ESRS, VSME or GRI will allow them to demonstrate credibility, build investor confidence, and future-proof their operations.

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