Your Omnibus Questions, Answered

Your Omnibus Questions, Answered

During our recent webinar discussing the EU Omnibus and what it means for firms’ sustainability reporting strategies, with more than 700 respondents live, we received over 60 questions which were mostly focused on the Omnibus proposal and sustainability reporting more generally.  Because we didn’t have time to answer every question during the session, we’d like to share some responses here:

• “How does the Omnibus impact non-EU-based companies with significant operations in the EU?” 
  The most significant impact for non-EU-based firms that have a significant footprint in the EU will be their obligation to report under the CSRD. The original requirements under the CSRD required non-EU firms with over €150 million in turnover in the EU to report on 2028 data in 2029; the Omnibus would raise this threshold to firms with over €450 million. Non-EU firms that were subject to the initial CSDDD requirements will still be considered in scope under the Omnibus, and will have to comply with the amended timeline and due diligence requirements. It is currently unclear, however, if this will all stick. For example, officials in the US recently proposed the PROTECT USA Act, which aims to limit the extent of the CSDDD, although this is still in the early stages. 
  
  
• “Does the Omnibus change the requirement to produce a climate transition plan?”
  The Omnibus proposal lessens requirements around climate transition plans. Under the CSDDD, firms must adopt and “put into effect” a transition plan for climate change mitigation. The Omnibus proposal removes the requirement for firms to put the transition plan into effect. The European Commission has not clarified what this means in practice.
  
  
• “What are you hearing from the EU on timing for acceptance of the proposal and adoption? And will it be adopted in full or just pieces?”
  Currently, the Omnibus is still a proposal and must undergo six stages of review and approval as part of the EU legislative process – which could take well over a year! However, the European Parliament is expected to vote on April 1 on whether it will fast-track this review process. We therefore hope to have more clarification in the first week of April on when and what in the Omnibus proposal will be adopted. This is a fast-moving issue, and we’ll continue to follow it closely.
  
  
• “Do you expect to see mentions of double materiality increase in sustainability reports this year?”
  In short – yes, we expect to see more organizations adopt double materiality assessment (DMA) as their de facto approach to materiality. We expect this for two reasons: firms are still reporting in line with standards such as CDP, GRI and ISSB, with each taking a different stance on materiality. By conducting a DMA, organizations simultaneously consider both impact and financial materiality, making it easier to streamline reporting requirements alongside the CSRD. Additionally, organizations will realize the value of DMA as a proactive management tool to provide a full view into their sustainability-related impacts, risks and opportunities – even if they aren’t immediately covered by the CSRD.
  
  

For more information on what is included in the Omnibus Simplification Package, please see Verdantix Strategic Focus: Unpacking The EU Omnibus And Its Impact On Sustainability Software. For firms located in the US, check back with us on March 31 for our upcoming report: Strategic Focus: ESG & Sustainability In The US.