EU’s CSRD Omnibus Update Drastically Reduces Mandatory Reporting Scope for 2026

The European Union has officially enacted the Omnibus I Directive, a major legislative update that significantly revises the Corporate Sustainability Reporting Directive (CSRD) by shrinking its mandatory scope by approximately 80%. Under the new thresholds, which entered into force earlier in 2026, only companies with at least 1,000 employees and a net turnover of €450 million will be required to comply with the stringent reporting framework.

Crucially, the update entirely removes listed small and medium-sized enterprises (SMEs) from the mandatory reporting scope. Previously, the CSRD captured a much broader base of companies—applying to those with just 250 employees and a €50 million turnover. The sweeping changes reflect an ongoing effort by the EU to alleviate the regulatory and financial burden on smaller businesses while focusing sustainability reporting obligations on the market’s largest organizations.

Furthermore, the new directive introduces a “protected undertaking” status. This provision legally allows companies with fewer than 1,000 employees operating within the supply chains of larger reporting corporations to decline data requests that exceed voluntary standard requirements, significantly reducing the pressure of Scope 3 emissions data gathering on smaller suppliers.