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On 13 October 2025 the European Parliament’s Committee on Legal Affairs (JURI) adopted its position on the Ominbus. The Parliament will vote on it, essentially simply a validation, in plenary on 20 October 2025. And then we move into the final phase – the trllogues as explained under ‘next Steps’ below. Many on the left and centre claim the outcome resulted more from bullying by EPP - the threat of partnering with the far right and risking the CSRD and CSDDD being dropped entirely - than from robust debate and compromise. Watch this webinar hosted by Richard Howitt on how the final position was arrived at.

Perhaps most significantly from a reporting perspective is the reduction in scope of the CSRD to companies that have over 1,000 employees or a net annual turnover of €450m. While aligned with the European Council this goes further than the Commission proposal of 1,000 employees and either €50m turnover or a balance sheet total of €25m. Read more in this Corporate Disclosures article.

MEP Pascal Canfin, Shadow Rapporteur for Renew Europe, voted for it but here on LinkedIn stressed it was not an ideal outcome. Indeed the outcome seems to ignore the huge weight of opinion in favor of limiting the extent of simplification and deregulation. European Central Bank (ECB) President sent this letter to the European Parliament expressing her concerns over the proposal to narrow the scope of the CSRD. And come early October 2025 this joint statement issued in July 2025, urging EU policymakers to preserve the core of the EU sustainability framework, boasted over 475 signatory organisations. The statement calls on EU policymakers to, amongst other things, maintain the principle of double materiality in reporting, include companies with 500+ employees in the scope of CSRD, and maintain risk-based corporate due diligence and climate transition plans.

 

Background In February 2025 the European Commission announced the Omnibus Proposals. The Questions and answers on simplification omnibus I and II (Q&A) and this DG FISMA newsletter summarize the proposals. The Omnibus package includes, amongst other things, a proposal for a Directive amending the CSRD and the CSDDD (Omnibus II) 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 (Omnibus I). Omnibus I, dubbed ‘stop-the-clock’ proposal, entered into force on 17 April 2025. Member states have until 31 Dec 2025 to transpose this into national law. See ACCA’s Q&A. On 11 July 2025 the Commission adopted the "quick fix" ESRS Delegated Act that pauses additional ESRS phase-in data points for CSRD wave-one undertakings by two years. As the press release  explains this "quick fix" became necessary as Wave 1 companies were not included into the "Stop-the-Clock" Directive that was part of the Omnibus. Hence, this Delegated Act is supposed to ensure that Wave 1 companies do not face additional requirements. Accountancy Europe, together with 17 other industry associations, has welcomed this delegated act and has urged the European Parliament and the Council of the EU to swiftly confirm their support so that it can quickly enter into force and so provide legal certainty for Wave 1 companies. Many raised concerns around due process and the lack of evidence in arriving at the Omnibus proposals. Some feel there should have been a complete ‘stop the clock’ giving time for a full proposal to be developed. For example, the study ‘Bad process leads to bad outcomes’ concludes that the Omnibus will fail to ease regulatory burden on business. The EU Ombudswoman is currently investigating the allegation that due process was lacking. An initiative by the academic community – the Copenhagen Declaration now has over 200 signatories - calls for evidence-based policy-making in the context of the ongoing Omnibus process. The Commission has issued a list of Level 2 regulations that have been deemed “non-essential”, and will therefore be deprioritised, which includes the Delegated Act on the standard for non-EU companies. This was due to be adopted in 2026 but will not now be adopted before October 2027. Some are concerned this will place EU companies at a disadvantage to non-EU companies as the latter will have fewer reporting obligations. Member states, meanwhile, continue to adopt legislation implementing the pre-Omnibus CSRD. See Accountancy Europe’s CSRD tracker, last updated on 26 September 2025, here.

 

Final Positions
A high level summary of the respective positions of the European Commission, European Council and European Parliament as we enter the trilogues is available in this LinkedIn post. The European Commission position is as per its proposal of 26 February 2025 (see ‘Background’ box and here and the European Council agreed its position ('negotiating mandate') on 23 June 2025, which is broadly aligned with that of the Commission, as shown here.  

Next Steps
The outcome of the Omnibus debate will be determined by an informal negotiation between the European Commission, European Council and European Parliament (‘trilogue’) that will start as soon as the Parliament votes through the position proposed by JURI on 20 October 2025. For the Omnibus package, the final trilogue session is currently scheduled for 8 December (subject to change).
Denmark, having assumed the rotating Presidency of the Council of the European Union for six months starting 1 July 2025, will preside over the trilogue negotiations and is keen to get it completed during its tenure. Despite having a centre left party in power, Denmark welcomes efforts to cut red tape as this Financial Times article testifies. Once approved member states will then transpose and implement.
The US is slowly waking up to the extra territorial impacts of the CSRD and CSDDD. On 10 September 2025 Reuters reported that the US Securities and Exchange Commission (SEC) has criticized the directives. It looks likely this pressure will intensify during the trilogue.

 

We have mixed views on the Omnibus proposal and are disappointed at what the final outcome is likely to be. The package fails to recognize and leverage the competitive advantage to be gained from the EU leading the global sustainable transition. We welcome the significant simplification of the sector agnostic ESRS. We think the 1,000 employee ESRS reporting threshold is too high. For companies employing 250-1,000, where the threshold looks likely to land, we suggest they be required to report on the basis of a new voluntary reporting standard (the ‘so called Omnibus VSME’) develop using the VSME with an additional module importing some provisions from the simplified ESRS including some materiality assessmen, that is VSME + new module. The reporting hierarchy would then comprise three tiers as follows: • Less than 250 employees – voluntary reporting using VSME with no assurance • 250-1,000 employees – voluntary reporting using ‘Omnibus VSME’ with no assurance • More than 1,000 employees – mandatory reporting using ‘simplified ESRS’ with assurance

 

ESRS Simplification
On 29 Sepember 2025 the EFRAG public consultation on revised and simplified exposure drafts (EDs) of the ESRS closed. This EFRAG factsheet summarises the key changes to each of the 12 standards. EFRAG must submit its final technical advice, including a cost benefit analysis, to the European Commission by 30 November 2025.
EFRAG now has the challenging task of refecting the feedback in the final drafts to be submitted to the Commission. EFRAG has received a large number of responses, mainly positive, and conducted a number of outreach events. In this outreach event EFRAG engaged with a broad range of stakeholders and heard broadly positive feedback. Meanwhile this outreach event focused on financial Institutions and investors and the event chair urged EFRAG to avoid further reductions in data points and to keep the disclosure of quantitative and qualitative anticipated financial effects mandatory.
As part of its response Accountancy Europe noted that if fair presentation for ESRS reporting and fair presentation conclusions for sustainability assurance are the EU goals, then the CSRD and ESRS should formally require this and so need to be changed by the European Parliament and Council. Read more here.

SRB Chair
On 23 September 2025 the Legal Affairs Committee (JURI) of the European Parliament had an opportunity to hear from and cross examine the three candidates - Kerstin Lopatta (SRB member and its interim chair before the appointment of De Cambourg), Adam Pradela (CFO Corporate Sustainability at DHL Group), and Chiara del Prete (current chair of EFRAG's Sustainability Reporting Technical Expert Group (SR TEG)) - shortlisted following the European Commission’s call for applications for the SRB chair position. This Corporate Disclosures article predicts Lopatta will get it though the final hurdle is EFRAG's general assembly, scheduled for 15 December 2025,

Wave 1 Experiences
Evidence continues to mount on the experiences from Wave 1 companies under the CSRD. In early September 2025 Copenhagen Business School hosted a webinar ‘Compliance or Competitive Edge? Learnings From the First Wave of CSRD Reports’. The webinar was based on research that revealed that ESRS were not proving disproportionately burdensome and reporting will likely give EU companies a competitive advantage. Similarly on 13 October 2025 law firm Frank Bold published a new study of the first wave of reports by 100 large European companies which finds that “the CSRD has done what it set out to do: push sustainability reporting beyond box-ticking, provide useful data to users and turn it into a genuine management tool for navigating climate and social risks.”

Sustainability Reporting Standards for SMEs
Since the European Commission officially adopted EFRAG’s Voluntary Sustainability Reporting Standard for non-listed Micro, Small, and Medium-sized Enterprises (VSME) as a Recommendation in late July 2025 EFRAG has been busy mobilizing implementation support (access the Commssion’s press release, Q&A, and the recommendation here and the standard, explainer videos, digital templates, and guidance on EFRAG’s website here.
On 25 September EFRAG released two complementary reports to support the application of the VSME. The first report provides practical support to SMEs that wish to report their GHG emissions based on VSME. The report maps 100 digital tools (e.g. GHG calculators, geolocation tools) that answered EFRAG’s call for interest and provides a comparative analysis of shortlisted GHG calculators that met pre-defined criteria described in the report. The shortlist of GHG calculators offers practical support to SMEs that wish to report their GHG emissions based on VSME.
The second report provides an overview of the 223 platforms and initiatives for SMEs reporting that answered EFRAG's call for interest. The report focuses on the comparison of the characteristics of those shortlisted platforms and initiatives that met pre-defined criteria and that completed a self-assessment grid to test VSME alignment. It then focuses on the comparison of the characteristics of those shortlisted platforms and initiatives that met pre-defined criteria and that completed a self-assessment grid to test VSME alignment. In this LinkedIn post Gabriella Lovas takes a closer look.
EFRAG has also launched an initiative to explore the possible development of a new EU voluntary reporting template for SMEs and start-ups. The objective is to enhance the accessibility andcomparability of financial information for SMEs and start-ups within the EU and also help attract investors and facilitate better access to finance for these businesses. EFRAG will evaluate the views of both potential preparers (e.g. SMEs) and users (e.g. investors, banks, etc.) regarding such disclosure and the possible content and structure of the proposed template.
EFRAG has published a summary report of the symposium “Sustainability Reporting Standards for SMEs — What are the issues?” at the 47th EAA - European Accounting Association Annual Congress. Key insights include turning reporting into a strategic tool to access finance, attract customers, and improve performance. This Corporate Disclosures article looks at how an SME might benefit from using the standard.

Omnibus VSME
Earlier this year the Commission said that once the Omnibus was finalized, the ‘Omnibus VSME’ that is proposed for voluntary use by companies employing less than 1,000 employees will be developed and, once agreed, follow the usual due process for EU delegated acts. As reported by Corporate Disclosures Eurosif, the European Fund and Asset Management Association (EFAMA) and Principles for Responsible Investment (PRI) have released a joint statement urging EU policymakers to ensure there is a “credible and proportionate voluntary sustainability reporting standard” for companies with over 250 employees that are not subject to the CSRD under the revised scope.
The joint statement says that the recently endorsed VSME standard is unlikely to be suitable “as it lacks the granularity, consistency, and reliability that investors and other sustainability information users need for financing purposes.” Hence, the statement recommends having a voluntary standard for small and mid-cap companies based on a subset of datapoints in the revised ESRS and which maintains a mandatory “but proportionate” materiality assessment. Others argue that the EU develop the standard by building on the VSME, perhaps adding a module for larger entities. Significantly the new standard will likely be the value chain cap, setting limits on the information in scope companies can ask from smaller companies in their value chain.   
The Financial Times recently published a case study, “If we are no longer legally obliged to report, should we continue voluntarily?” (paid subscription).

EFRAG Update

The September EFRAG Update is available here. This month’s highlights include: a roundup of the EFRAG ESRS Outreach events on the simplified draft ESRS; the Save the Date for the EFRAG Conference on 4 December 2025 to celebrate the simplified draft ESRS; the new EU Voluntary Reporting Template for SMEs and Start-Ups, VSME educational materials and VSME market study.

 

We welcome the simplification of the ESRS – the current standards were developed in a hurry and were over-engineered - and congratulate EFRAG on the rapid progress it has made to date. The revised standards are much simpler and clearer than the original ones. Meantime, the VSME is a timely and high quality addition to the suite of ESRS. The VSME seems to provide a good place to start as the basis for a standard for voluntary use by companies with 250-1,000 employees (so called ‘Omnibus VSME’).

European Union
While the Omnibus proposal maintains the limited assurance requirement, proposes no changes to assurance providers, and maintains the EC’s delegated power to adopt a limited assurance standard, the proposal does remove 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. The Commission intends to issue targeted assurance guidelines by 2026. Moreover, to protect SMEs it proposes 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 ‘Omnibus VSME’.
Until the targeted assurance guidelines are issued assurance providers can consult the CEAOB guidelines on limited assurance on sustainability reporting. In addition, the European Contact Group (ECG) has published illustrative examples of limited assurance reports for engagements in accordance with the CSRD - see the unmodified illustrative report here and the modified illustrative report here. These may need adapting to align with specific jurisdictional requirements and standards.

ISSA 5000
Since the IAASB and the IESBA launched in January 2025 a joint effort to support effective implementation of their landmark standards aimed at advancing trust and transparency in sustainability reporting and assurance both Boards have been busy promoting adoption of the standards, coordinating translations, and ramping up implementation support.
The International Standard on Sustainability Assurance (ISSA 5000) becomes effective for periods starting on or after 15 December 2026, with early adoption permitted and encouraged. The IAASB believes the ISSA 5000 is scalable and adaptable to regional regulatory requirements, such as the CSRD, and can be used with any sustainability reporting framework, standard or other suitable criteria including EFRAG’s VSME, and is applicable to all assurance providers.
French, Lithuanian, Estonian, and Finnish translations of ISSA 5000 are now available here. ISSA 5000 FAQs are available in French here. Additional translations are in progress including Arabic and Spanish. Once available these will be available here.
The IAASB’s ISSA 5000 Adoption and Implementation resources continue to grow. During early October 2025 the IAASB held a three-part global webinar series designed to assist stakeholders as they adopt and implement ISSA 5000. Access the recordings here.

KPMG have published a report on ESG assurance in the UK which finds that aross the FTSE 100, 85% of companies now obtain third party ESG assurance.  

IESSA
In concert with the IAASB, the IESBA launched its new International Ethics Standards for Sustainability Assurance (IESSA) and other new sustainability-related provisions establish a strong ethical foundation for sustainability reporting and assurance engagements. These standards will become effective for sustainability assurance engagements on sustainability information for periods starting on or after 15 December 2026, with early adoption encouraged. Read more in this article.

The IESBA’s IESSA Implementation Resources continue to be expended, most recently on 9 September 2025 with IESBA’s release of two new staff publications - Questions and Answers on Using the Work of an External Expert and Proportionality of the IESSA. These publications explain key aspects of the standard related to using the work of an external expert and the proportionality of the ethics and independence provisions for sustainability assurance in the IESSA.

IESBA Ethics and Independence Conference 2025

On 15 September 2025 Commissioner Albuquerque gave the closing keynote at the IESBA Ethics and Independence Conference 2025. ‘How to enhance trust in the audit market: a European perspective’, in which the Commissioner gave an update on the Omnibus, noting that the Commission would issue targeted guidance on sustainability assurance rather than the adoption of ISSA 5000 and IESSA. All speeches and session videos are available on the conference website.

We support the timely global adoption and effective implementation of the ISSA 5000 and IESSA but urge close monitoring of the impact on value chain reporting and assurance and, where that impact is deemed disproportionate, modifying the standards with timely limited scope amendments.

 

ISSB Update
The ISSB Update, summarising the September 2025 ISSB meeting, and the latest episode of the ISSB podcast  are available. In the podcast, ISSB Chair and Vice Chair share updates on their recent engagements with stakeholders around the world and provide insights into key ISSB updates, including:  the publication of education material about disclosing Anticipated Financial Effects; the ongoing public consultation on proposed amendments to SASB Standards that closes on 30 November 2025 (see the recording and slides from a recent explainer webinar); decisions regarding the proposed Amendments to Greenhouse Gas Emissions Disclosures in IFRS S2 that simplify reporting on indirect GHG emissions associated with investments (Scope 3: Category 15); updates on research project on nature—biodiversity, ecosystems and ecosystem services (BEES); and updates to the inaugural ISSB membership.

IFRS Sustainability Symposium 2025
IFRS Sustainability Symposium 2025 to be held on 30 October 2025 in London is still open for registration for both virtual and in-person participants. The complete agenda is now available. Watch this video in which ISSB Chair and Vice-Chair discuss key highlights and what to expect.

IFRS Foundation Adoption and Implementation Support
The IFRS Foundation continues to provide and enhance adoption and implementation support. It has held 12 sessions in its ‘Perspectives on Sustainability Disclosure’ webinar series. Episode 12 explored how organisations use climate-related scenario analysis to assess and disclose their climate resilience in line with IFRS S2. View all recordings here.

Adoption of ISSB Standards
As at the start of October 2025 36 jurisdictions have adopted or otherwise used the ISSB Standards or are in the process of finalising steps towards introducing them into their regulatory frameworks. Details on the use of IFRS sustainability disclosure standards by jurisdiction can be found here. This IFAC article looks at Indonesia’s adoption roadmap. Many countries are extending transitional reliefs to give time for implementation. For example, as this Corporate Discosures article explains, the New Zealand External Reporting Board (XRB) has proposed extending the transitional reliefs on Scope 3 GHG emissions disclosures and assurance provided in the second New Zealand Climate Standard (NZ CS2). Meantime in the UK the government is consulting on draft ISSB-aligned UK Sustainability Reporting Standards (UK SRS). Recently, the Institute of Chartered Accountants of Scotland (ICAS) argued that the UK should embrace the double materiality approach similar to the CSRD.

Integrated Thinking and Reporting
The IFRS Foundation have created a new resource center for Integrated Thinking and Reporting consolidating key resources, training and news here.

Taskforce on Nature-related Financial Disclosures (TNFD)
The TNFD 2025 Status Report reveals that 620 organisations from 50 countries have publicly committed to reporting nature-related information in line with its recommendations. It also reveals that over 500 TNFD-aligned reports have been published to date but few early adopters have reported against the framework in full. On average, these reports included between eight and nine of the recommended disclosures, and three quarters (78%) of TNFD reporters integrated nature-related disclosures with climate-related information.
Stakeholders have until 3 November 2025 to respond to TNFD Discussion paper on identification, assessment and disclosure of dependencies and impacts on nature in financial portfolios.

International Organization for Standardization (ISO)
ISO has issued a new standard - ISO 17298 – for assessing biodiversity-related dependencies, impacts, risks and opportunities (DIROs). The standard is designed to be interoperable with the TNFD framework. Read more here.

Global Reporting Inititaive (GRI)

Responding to EFRAG’s public consultation on amendments to the ESRS, GRI has called on EFRAG to enhance impact materiality in the ESRS to deliver the consistent and relevant corporate information needed by stakeholders on impacts, risks and opportunities.

GRI has started a public consultation to revise GRI 201: Economic Performance. The revised standard will be renamed ‘Monetary Flows’ and marks the first phase of a major revision of all GRI Standards related to economic impact. Read more here.

We believe that the IFRS Foundation ought to focus on implementation of its present suite of standards and think about how best to help non-listed SMEs respond to requests for sustainability information from larger companies and finance providers. The recently finalized VSME may prove to be a useful basis for a global standard. The IASB recently updated the IFRS for SMEs, its financial reporting standard for non-publicly accountable entities.

30 October: IFRS Sustainability Symposium, London and Online
6 November: Good Governance Academy 14th Colloquium, Online
1 December: Corporate Disclosures 2025, London
4 December: EFRAG Conference on Amended ESRS, Brussels and Online

2026

17-20 November: World Congress of Accountants (WCOA) 2026, Seoul, South Korea