Overview
On 26 February 2025 the European Commission announced the Omnibus Proposals, the first set of legisaltive proposals to help realise the Competitiveness Compass presented the previous month. The Questions and answers on simplification omnibus I and II (Q&A) summarizes the changes. The package includes, amongst other things, a proposal for a Directive amending the CSRD and the CSDDD and a proposal which postpones the application of all reporting requirements in the CSRD for companies that are due to report in 2026 and 2027 (so-called wave 2 and 3 companies) and which postpones the transposition deadline and the first wave of application of the CSDDD by one year to 2028. The latter is dubbed a ‘stop-the-clock’ proposal. The table below shows extracts from the Q&A pertianing to the CSRD.

Reactions
There has been a flood of reactions to the announcement, from the highly suportive through to the deeply disappointed, as explained in this article. SMEunited welcomed the proposals saying they would offer breathing space for SMEs and “should tackle the unintended trickle-down effects for SMEs”. On 21 March 2025 in an FT event SMEunited’s Secretary General stressed the vital role the Omnibus stands to play in cutting red tape and addressing the trickle down impact of CSRD and CSDDD on SMEs. On the ‘other side of the ledger’ Frank Bold were highly critical saying it threatened to roll back a decade of progress as they explain in their press release. Meantime the EFRAG Sustainability Reporting Board (SRB) met officials of the European Commission and unanimously expressed its support for the proposals in so far as they affect sustainability reporting..

 

Timing and Approval

The Commission has urged EU co-legislators to fast-track adoption of the proposal to delay CSRD and CSDDD implementation (‘stop-the-clock’). If agreed, trilogues could conclude by May 2025, with Member States expected to transpose the directive by 31 December 2025. The French Senate has already proposed a four year delay to CSRD. On 26 March 2025 the Council approved the Commission’s proposal and on 3 April an overwhelming majority of MEPs agreed to fast-tracking.

The timeline for agreement on the proposal for substantive amendments to CSRD and CSDDD is much longer. Adoption could take at least 12 months, followed by national transposition and an implementation period. Given the diverging views from MEPs and EU Member States we can expect significant debate ahead.

 

Sustainability Assurance

While the Omnibus proposal maintains the limited assurance requirement and proposes no changes to assurance providers, the EC intends to issue targeted assurance guidelines by 2026. The proposal maintains the EC’s delegated power to adopt a limited assurance standard but removes the 2026 deadline for adopting a standard and suggests deleting the possibility of moving from a requirement for limited assurance to a requirement for reasonable assurance. And ot protect SMEs it introduces provisions requiring assurance providers to respect the obligation that companies should not request information from value chain companies with fewer than 1,000 employees beyond what is included in the voluntary sustainability reporting standard (VSME). This Corporate Disclosures article attempts to unpack the implications of these proposals.

 

5. What are the main changes that the omnibus package is bringing to the CSRD?
The omnibus package will bring several changes to the CSRD, making it more proportionate and easier to implement by companies:

• Reduction of the scope of reporting companies: The reporting requirements would only apply to large undertakings with more than 1000 employees (i.e. undertakings that have more than 1000 employees and either a turnover above EUR 50 million or a balance sheet total above EUR 25 million) This means that the number of companies in scope will be reduced by about 80%. The new scope will be more closely aligned with the key scope thresholds of the CSDDD.    
• ‘Value chain cap': For companies which will not be in the scope of the CSRD any more (up to 1,000 employees ), the Commission will adopt by delegated act a voluntary reporting standard , based on the standard for SMEs (VSME) developed by EFRAG. That standard will act as a shield, by limiting the information that companies or banks falling into the scope of the CSRD can request from companies  in their value chains with fewer than 1,000 employees..
• Commission's commitment to revise the European Sustainability Reporting standards (“ESRS”): The Commission will revise the delegated act establishing the ESRS, with the aim of substantially reducing the number of data points, clarifying provisions deemed unclear, improving consistency with other pieces of legislation and reducing the number of data points.  
• Deletion of sector-specific standards requirement: The proposal will delete the empowerment for the Commission to adopt sector-specific standards.
• Removing the reasonable assurance standard: The proposal is removing the possibility for the Commission to propose moving from a limited assurance requirement to a reasonable assurance requirement.
• Postponement of reporting requirements: Today's package proposes postponing by two years the entry into application of the reporting requirements for large companies that have not yet started implementing the CSRD and for listed SMEs (Wave 2 and 3) in order to give time to the  co-legislators to agree to the Commission's proposed substantive changes.          

6. What is the scope of the new CSRD?
Currently, the CSRD applies to all large companies (defined as companies above two out of the three following thresholds: €50 million net turnover, €25 million balance sheet total, 250 employees), as well as SMEs whose securities are listed on an EU regulated market. However, many businesses and industry associations have suggested that the Commission should revise the scope by excluding the smaller companies. Mario Draghi's report on competitiveness also highlighted that the rules would impose a disproportionately high burden on SMEs and small mid-caps than on larger companies.   
Today's proposal will reduce the current scope of the CSRD to large companies with more than 1000 employees (i.e. companies that have more than 1000 employees and either a turnover above EUR 50 million or a balance sheet above EUR 25 million). Those companies will be required to report against the European Sustainability Reporting Standards (ESRS), while these standards will also be revised and simplified.
Companies outside the scope of CSRD (companies with up to 1,000 employees) may choose to report voluntarily on the basis of a simplified voluntary standard to be adopted by the Commission, based on the voluntary standards for SMEs (VSME) developed by EFRAG.
The Commission estimates that the proposal will reduce the number of companies in scope by 80%. 
Source: Questions and answers on simplification omnibus I and II, European Commission, 25 February 2025

Omnibus Implications

On 28 March 2025 EU Commissioner Alburquerque addressed the EFRAG SRB to outline the Commission's specific mandate to EFRAG on the simplification of the first set of ESRS. The mandate states that the Commission will take into consideration EFRAG’s technical advice when adopting the proposed delegated act modifying ESRS (see above). The Commission urges EFRAG to provide this advice by 31 October 2025 as this would allow the Commission to adopt the corresponding delegated act in time for companies to apply the revised standards for reporting covering financial year 2027, potentially with an option to apply the revised standards for reporting covering financial year 2026 if companies wish so.  
 

Commission Seeks Applications for New SRB Chair
The European Commission is organising a selection procedure for the position of the Chair of the EFRAG SRB. The deadline for applications is 15 May 2025 at 12.00 (mid‑day). All relevant information can be found in this call for application document.

Sustainability Reporting Standards for SMEs

Late last year EFRAG released the proposed sustainability reporting standard for voluntary use by non-listed SMEs (ESRS VSME) and submitted it to the European Commission together with a cost benefit analysis (CBA) and basis for conclusions. The Commission is now conducting its own due diligence, including inter service and public consultation, before issuing the final standards.The ESRS VSME is expected to have the status of a recommendation. EFRAG has also released educational videos on the ESRS VSME and has initiated a range of activities, including building an ecosystem, to help raise awareness of and implement the standard. There are now many translations of the VSME as EFRAG recently announced. As explained above the Omnibus proposal may place even greater emphasis on the VSME: it may be the basis for reporting for any comoany emplying less than 1,000 employees.  
EFRAG held the first public session of the newly established SME Forum on 17 February 2025. A state of a play of the VSME Standard and VSME Ecosystem and first results of the SME Forum survey were shared and discussed. Watch the video here. To help broaden and deepen the ecosystem supporting the ESRS VSME, EFRAG has expanded its VSME Community following this invitation. Both the SME Forum and VSME Community have been consulted on proposed guidance on the standard.

NESRS

On 15 January 2025 the EFRAG SRB approved for public consultation the draft ESRS for non-EU groups (NESRS). The EFRAG project page hosts the pre-approved NESRS Exposure Draft (ED) but no dates of exposure are provided, likely a consequence of the Omnibus. After the consultation and any resulting amendments, the Commission plans to formally adopt the standard in 2026. Read this article about the standard.

 

Friends of EFRAG

On 18 February 2025 EFRAG announced that another 14 companies have officially become Friends of EFRAG, demonstrating their commitment to sustainability reporting and supporting EFRAG's mission. One of the new friends is Macintyre Hudson LLP (MHA), the UK member of Baker Tilly International, a network of independent accountancy firms that plans to list on the London Stock Exchange as explained here.

 

EFRAG Update

To help interested parties stay up to date with the latest developments in sustainability reporting EFRAG has launched the EFRAG Monthly Update Podcast. Each episode provides insights from the key updates, latest developments, and trends in sustainability reporting. The latest episode, for February 2025, can be accessed here.

 

ESRS XBRL Tagging

EFRAG has launched two videos demonstrating the digital tagging of an ESRS report using the ESRS Set 1 XBRL Taxonomy. Watch the videos here to learn how ESRS statements can be digitally tagged.

 

CSRD Reports

Various organisatiosn have started to catalogue and analyze the first tranche of reports prepared under the CSRD. Sustainability Reporting Navigator has created a publicly available Google Sheet accessible here for anyone wishing to contribute and / or track published CSRD reports. Similarly BWD Staretgic North America is compiling select extracts from CSRD aligned reports so as to offer insights into reporting practices.

IFAC
IFAC and Accountancy Europe have publicly reaffirm their commitment to high-quality and consistent sustainability assurance. Achieving this requires a collective effort by all stakeholders, robust professional standards, and regulatory consistency.

 

ISSA 5000

On 3 March 2025 at the ICAEW Sustainability Event Tom Seidenstein, Chair of the International Auditing and Assurance Standards Board (IAASB),gave a keynote address on sustainability reporting and assurance. Seidenstein emphasized the ultimate goal: a global system where sustainability-related information is as trusted as financial reporting.
In late January 2025 the IAASB and the International Ethics Standards Board for Accountants (IESBA) launched an integrated effort to support effective implementation of their landmark standards aimed at advancing trust and transparency in sustainability reporting and assurance.
The joint announcement said: “taken together, the IAASB and IESBA sustainability-related standards (ISSA 5000 and IESSA), as well as the new IESBA standard on using the work of experts, provide a unified global approach to address the growing demand for trustworthy sustainability information to support stakeholder decisions.” In jurisdictions adopting the standards become effective for periods starting on or after 15 December 2026, with early adoption permitted and encouraged. 
International Standard on Sustainability Assurance 5000 (ISSA 5000) provides a principles-based framework for conducting assurance engagements on sustainability information reported by entities. The IAASB believes the standard is scalable and adaptable to regional regulatory requirements, such as the EU’s CSRD, and can be used with any sustainability reporting framework, standard or other suitable criteria including the ESRS VSME. Furthermore the IAASB says it is applicable to all assurance providers and for organizations of all sizes.
To support practitioners, the IAASB has released new guidance, including an implementation guide, fact sheet, FAQs, and FAQ video series, and will hold a webinar series in the coming months. Access these here.
For limited assurance engagements under the CSRD readers are reminded of the CEAOB guidelines on limited assurance on sustainability reporting. In addition, the European Contact Group (ECG) has published illustrative examples of limited assurance reports, based on the International Standard on Assurance Engagements (ISAE) 3000 (Revised), on sustainability statements for EU/EEA-listed entities prepared in accordance with the CSRD. See the unmodified illustrative report here and the modified illustrative report here. While the examples provide useful insights into how the initial limited assurance for sustainability statements under the CSRD framework might look, they may require adaptation to align with specific jurisdictional requirements and standards.
An event hosted by the ICAEW on 3 March 2025 included a session that examined the challenges of providing assurance on sustainability information. The challenges discusesd included materiality and accumulating misstatements, the lack of readiness of companies for sustainability assurance engagements, and the  use of estimates and forward-looking statements in sustainability disclosures. Read more here.
In its own examination of the reports catalogued by the aforementioned Sustainability Reporting Navigator (SRN), Corporate Disclosures says the early indications are that the Big Four has captured the lion’s share of the CSRD assurance market. Of the 133 CSRD-compliant reports available on the SRN database at the time of writing, the Big Four provided assurance on 95% of them. The market concentration may be even worse than the financial audit market. Indeed.

 

IESSA

Following its March 2025 meeting in New York the IESBA Chair Gabriela Figueiredo Dias published this video message on the key points of discussion from that meeting.
IESBA says that the International Ethics Standards for Sustainability Assurance (including International Independence Standards (IESSA), the provisions related to sustainability reporting, and the new standards addressing using the work of an external expert in the International Code of Ethics for Professional Accountants (including International Independence Standards), establish a strong ethical foundation for sustainability reporting and assurance engagements. While the Public Interest Oversight Board’s (PIOB) certified the standards and International Organization of Securities Commissions (IOSCO) issued a Statement of Support (see the media release here) calling on its members to apply or be informed by the new framework, IFAC CEO and others are concerned about practicability.  
The IESBA has released Basis for Conclusions documents, fact sheets and technical overviews on the standards. Additional implementation support material and activities, including a series of webinars and implementation guides, will follow in the near future. Access these here.
In February and early March 2025 the IESBA hosted a four part webinar series on the new standards - access the recordings and presentation slides here.

IFRS Foundation

As the IFRS Foundation published its 2024 annual report and financial statements, Corporate Disclosures was reporting that the IFRS Foundation will cut its headcount by 15% due to funding constraints. It is unclear how this wil impact the work of the International Sustainability Standards Board (ISSB).

The ISSB Update, summarising the March 2025 ISSB meeting, is now available. You can also listen to the latest episode of the ISSB podcast in which Chair Emmanuel Faber and Vice-Chair Sue Lloyd share insights into developments from the ISSB, including progress on guidance around transition plan disclosures, key takeaways from the March ISSB meeting; and upcoming educational materials and events.
On 14 March 2025 the IFRS Foundation held this virtual stakehlder event —disclosures about transition plans - to obtain information from stakeholders to inform the work to tailor the Transition Plan Taskforce (TPT) materials. All event materials are available here. Meeting slides and recordings for the 12 March 2025 IFRS Sustainability Reference Group meeting, which included the ISSB Technical Work Plan 2026 and proposed amendments to IFRS S2, are also now available.
The IFRS Foundation recently announced the availability of new IFRS Sustainability translations including Brazilian Portuguese, French, Romanian and Spanish. And so far the IFRS Foundation has held eight webinars on in its sustainability disclosure series, “Perspectives on Sustainability Disclosure”. Links to the slides and recording are available for the most recent webinar on 'The future of integrated reporting and integrated thinking’. The IFRS Foundation has also made it possible to access SASB Standards in both PDF and HTML formats, free of charge for non-commercial use, in the new SASB Standards Navigator. And finally, to help jurisdictions adoption or other use ISSB Standards, the IFRS Foundation has launched the Jurisdictional Roadmap Development Tool.

In November 2024, the IFRS Foundation published a guide designed to help companies with the fundamental task of identifying and disclosing material information about sustainability-related risks and opportunities that could reasonably be expected to affect their cash flows, their access to finance or cost of capital over the short, medium or long term. The IFRS Foundation has now released a webcast series to further support companies with this task.

 

Global Reporting Inititaive (GRI)

On 19 March 2025 the Global Sustainability Standards Board (GSSB) – the body responsible for the GRI standards – approved new topical disclosure standards on climate (GRI 102) and on energy (GRI 103).

Through a combination of advocacy, education, and direct action, professional accountancy organizations (PAOs) are making a meaningful contribution to the sustainability agenda. This IFAC Gateway article examines how PAOs can can lead the way to net zero. IFAC has a catalogue of publicly available sustainability courses and certifications offered by PAOs on demand, for a fee or free, to help accountants gain sustainability knowledge.

The World Bank Centre for Financial Reporting Reform (CFRR) held its first Sustainability Reporting Workshop on 19 March 2025 in Vienna, Austria as part of the 2025 CFRR Ministerial Conference, One of its three flagship regional programs is EAASURE which aims to enhance corporate financial reporting practices and support the adoption and roll out of sustainability reporting in the Europe and Central Asia (ECA) region, prioritizing Western Balkans (Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia) and EU Eastern Partnership (Armenian, Azerbaijan, Georgia, Moldova and Ukraine) countries. On 28 February 2025 in Tbilisi, Georgia the BARTA award ceremony, part of the EAASURE program, recognized improvements in sustainability reporting in Georgia. The BARTA award was presented at the Vienna workshop.

7 April: EFRAG webinar, ‘VSME In Action: Empowering SMEs for a Sustainable Future’
16 April:  IFRS webinar, ‘Integrating ISSB Disclosure Standards into Poducts and Services’
17 April: Good Governance Academy webinar, ‘Chairing a Strategic Transformation’
15 May: Good Governance Academy 13th Colloquium, ‘Sensible Regulation and Sensible De-regulation’
23-24 June: IFRS Foundation Conference, London
30 October: IFRS Sustainability Symposium, London

6 November: Good Governance Academy 14th Colloquium