EU Council approves Omnibus I Directive

At a glance

• Omnibus I Directive published in Official Journal and entered into force 18 March 2026.
• CSDDD scope narrowed with reduced liability and fines and application delayed.
• CSRD scope reduced, with higher thresholds, new exemptions, sector standards removed and expanded rights to withhold information.

The EU Council approved the Omnibus I Directive on 24 February 2026, following the European Parliament's approval on 16 December 2025. The Directive was published in the Official Journal on 26 February 2026 as Directive (EU) 2026/470 and entered into force on 18 March 2026.  Omnibus I will make significant amendments to the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD).

Key changes to the CSDDD

• The scope of the CSDDD has reduced. Broadly, the CSDDD will now only apply to (1) EU organisations that have 5,000 employees and EUR1.5 billion net turnover, (2) non-EU organisations that have EUR1.5 billion net turnover in the EU, and (3) EU and non-EU organisations that have franchising or licensing arrangements in the EU, have more than EUR275 million net global turnover and the royalties are more than EUR75 million. The Directive will also apply to ultimate parent companies where the group meets the above thresholds.
• The due diligence obligations have been reduced. However, organisations are still required to take a risk-based approach.
• The EU harmonised liability regime has been removed, and a cap has been imposed on fines, so that they cannot exceed 3% of an organisations net global turnover.
• Organisations will no longer be required to adopt a climate change mitigation transition plan.
• The deadline to transpose the Directive has been delayed until 26 July 2028, and the requirements will not apply until 26 July 2029.

Key changes to the CSRD?

• The scope of the CSRD has been reduced. Essentially, the CSRD will only apply to EU organisations and non-EU issuers that have 1,000 employees and EUR450 million net turnover, and non-EU parent organisations that have EUR450 million net turnover in the EU and an EU subsidiary or a branch in the EU with more than EUR200 million net turnover. Organisations that are not captured by the new thresholds will not be required to report for financial years starting on or after 1 January 2027.
• An exemption has been introduced for financial holding undertakings, and the existing subsidiary reporting exemption has been extended. In addition, protected undertakings (which are undertakings with less than 1,000 employees) will be allowed to refuse to provide information that exceeds the voluntary SME standard.
• Sector-specific standards have been removed, and the rights of organisations to withhold information have been strengthened (eg organisations can withhold information if it would be seriously prejudicial to the undertaking’s commercial position to disclose it).