Omnibus I – formally Directive (EU) 2026/470, published on 26 February 2026 and in force from 18 March 2026 – significantly narrows the scope of the Corporate Sustainability Reporting Directive (CSRD), raising the thresholds at which EU undertakings must report and introducing a separate, higher bar for non-EU groups. Companies that previously anticipated CSRD obligations should reassess their position immediately, as the revised rules may remove or substantially alter their reporting duties.
What Changed and When
The European Commission's Omnibus I package was designed to reduce regulatory burden across several interlocking frameworks, including the CSRD and the Corporate Sustainability Due Diligence Directive (CSDDD). For CSRD, the central change is a sharp upward revision of the size thresholds that determine which undertakings are in scope. The practical effect is that a large number of companies that had already begun CSRD preparation programmes are no longer required to report – at least under the revised EU rules.
The directive entered into force on 18 March 2026. Member States must transpose the CSRD amendments into national law by 19 March 2027. Amendments to the CSDDD have a later transposition deadline of 26 July 2028. Until national implementing measures are in place, companies should monitor their home Member State's legislative calendar carefully, as the precise domestic rules remain subject to national implementation.
The European Commission is also mandated to revise the European Sustainability Reporting Standards (ESRS) through a delegated act. The timing and substance of that revision have not yet been published; companies building reporting infrastructures around the current ESRS should treat those standards as subject to further change.
Revised Thresholds: Who Is Now In Scope
Under the Omnibus I amendments, CSRD obligations apply only to undertakings that exceed both of the following criteria:
- More than 1,000 employees
- More than EUR 450 million net turnover
This is a considerable increase from the thresholds that applied under the original CSRD text. Companies that fell within the earlier "large undertaking" category solely on the basis of balance sheet or lower turnover figures are likely to have dropped out of scope entirely.
For non-EU groups, the triggering conditions are different. A non-EU parent group must report if it generates more than EUR 450 million in EU turnover and has at least one EU subsidiary or branch whose own turnover exceeds EUR 200 million. Both legs of this test must be satisfied. Groups relying solely on smaller EU subsidiaries or branches are unlikely to meet the branch/subsidiary threshold even if overall EU revenue is substantial.
It is worth noting that the interaction between the CSRD and the CSDDD frameworks remains material for in-scope companies. For a fuller analysis of the due diligence obligations that run in parallel, see our guide on CSDDD and Omnibus due diligence requirements in the EU.
Immediate Implications for International Companies
The threshold revision creates several planning questions for multinationals and their holding structures, particularly those that had already committed resources to CSRD compliance programmes. The key issues to address now include:
- Re-evaluate in-scope status. Apply the revised dual test (employees and turnover for EU undertakings; EU turnover and EU subsidiary/branch size for non-EU groups) against current consolidated figures. Do not assume that prior compliance analyses remain valid.
- Review holding company and group structure. For non-EU groups, the EUR 200 million subsidiary/branch threshold means that corporate governance decisions about which entities hold EU operations can directly affect reporting exposure. A company re-domiciliation or restructuring executed for other reasons may inadvertently alter CSRD status.
- Assess beneficial ownership and consolidation perimeters. Omnibus I does not eliminate the relevance of group-level consolidation for threshold calculations. Beneficial ownership chains and the treatment of joint ventures or associates under applicable accounting standards remain relevant to the analysis.
- Track national transposition. The 19 March 2027 deadline for Member States to transpose CSRD amendments means that domestic rules in your primary EU jurisdiction may differ from the directive text until implementing legislation is passed. Monitor EUR-Lex and national legislative registers for updates.
- Preserve optionality on ESRS. Given that the Commission will revise the ESRS by delegated act, companies that remain in scope should avoid locking in reporting infrastructure based on current standards without flexibility to adapt. Companies that drop out of scope may nonetheless wish to maintain voluntary disclosure frameworks aligned with investor expectations and ESMA guidance.
Companies with operations in multiple Member States should also note that EBA guidance touching on sustainability disclosures for financial institutions may interact with the revised CSRD scope in ways specific to the financial sector. Sector-specific considerations are outside the general scope of this alert but merit separate review.
If you are uncertain whether your group falls within the revised thresholds or how Omnibus I affects your existing compliance programme, our team is available to assist. Please write to info@ferrazwhitmore.com or visit our contacts page to arrange a discussion.
Structural Considerations: Holding Companies and Group Reorganisations
The revised thresholds place renewed emphasis on how EU operations are structured. For non-EU groups in particular, the question of whether an EU subsidiary or branch clears the EUR 200 million turnover threshold is not merely a reporting technicality – it is a structural decision with compliance consequences. Groups that are reorganising their European holding structures for commercial or tax reasons (see our overview of tax law services) should factor CSRD exposure into the reorganisation analysis from the outset rather than treating it as a secondary consideration.
Similarly, company re-domiciliation – whether of an existing EU entity or of a non-EU parent seeking closer proximity to EU capital markets – can shift which legal entity bears reporting obligations. Corporate governance frameworks governing the newly domiciled entity will determine how sustainability data is collected and disclosed. These interactions require coordinated legal and compliance advice rather than siloed analysis.
Our corporate law practice regularly advises on the structural and governance dimensions of regulatory change. If Omnibus I has created uncertainty about how your group's legal architecture interacts with the revised CSRD rules, we would be glad to assist.
What Remains Unchanged
It is important not to overread the scope of Omnibus I. The following elements of the CSRD framework remain in place:
- The obligation to report in accordance with ESRS persists for in-scope companies, subject to the forthcoming delegated act revising those standards.
- Third-country branches and subsidiaries of non-EU groups that meet the revised thresholds remain within scope; Omnibus I did not exempt non-EU groups entirely.
- Member States retain discretion in certain areas of national implementation; the directive sets minimum standards but does not fully harmonise every procedural aspect.
- Voluntary sustainability reporting, investor-driven disclosure requirements (including those shaped by ESMA guidelines), and contractual sustainability obligations agreed with counterparties are unaffected by Omnibus I.
Next Steps and How We Can Help
Companies that drop out of the mandatory CSRD scope should document the basis for that conclusion carefully, given that national transposition may introduce nuances before the March 2027 deadline. Companies that remain in scope face an evolving ESRS and a CSDDD framework whose amended transposition deadline runs to July 2028. Neither situation calls for inaction.
Ferraz & Whitmore advises international companies, investment funds, and holding structures on the intersection of EU regulatory obligations, corporate structuring, and cross-border governance. If the Omnibus I changes raise questions for your organisation – whether about current in-scope status, group restructuring, or compliance programme design – please contact us at info@ferrazwhitmore.com or through our contacts page.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.