The Omnibus Package: An overview of the proposed changes to the European Sustainability Reporting Directive (CSRD, VSME)

The European Commission published the latest draft versions of the ESRS (European Sustainability Reporting Standards) on May 6^th. The review of the sustainability standards aims at achieving a simpler, streamlined standard and improving interoperability with other frameworks such as ISSB. The feedback round was open until June 3^rd and the delegated act is expected to entry into force in the third quarter of this year.  

The new ESRS drafts affect both the CSRD (Corporate Sustainability Reporting Directive) and the VSME (Voluntary Standard for SMEs). According to the new standards, the CSRD is now mandatory for companies with a worldwide net turnover of € 450million and more than a thousand employees. For smaller companies, the VSME sets reporting limits. Companies with up to a thousand employees are now protected by a value chain cap: they do not need to report more data than requested by the VSME. 

Greater simplification was also granted for the CSRD: the number of mandatory datapoints was reduced by more than 60%. Furthermore, the undue cost or effort principle was introduced to reduce reporting costs and complexity when gathering data. According to this principle, companies can use information that is reasonable and supportable from internal and external sources. Nonetheless, companies should do a “cost-benefit” consideration of the value of the resulting information for users and improve data availability over time. 

Lastly, the Commission has proposed turning the VSME into a delegated regulation (still subject to adoption). This means it will be directly applicable across all Member States. To support implementation, EFRAG (European Financial Reporting Advisory Group) is working on tools aimed at facilitating the application of the ESRS, such as the VSME digital template and the VSME to XBRL converter. 

What next? 

The regulation will apply from 1 January 2027. Do you want to find out where your company stands in relation to the new standard?  

Reach out to us so we can support you in defining a winning sustainability strategy and align with EU’s sustainability standards.