EU Omnibus I: What Mid-Market Companies Need to Know

The EU's Omnibus I proposal, published in February 2025, represents a significant shift in the Corporate Sustainability Reporting Directive (CSRD) landscape. While not yet final law, the proposed changes are substantial enough to warrant immediate attention from mid-market companies. In this comprehensive guide, we break down what Omnibus I means for your organization and why preparation is crucial regardless of the final regulatory outcome.

What Is the Omnibus I Proposal?

The Omnibus I proposal is an amendment to the existing CSRD framework, designed to address concerns from business stakeholders about the regulatory burden of comprehensive sustainability reporting. Published by the European Commission in early 2025, it proposes several structural changes to how companies report on environmental and social standards (ESRS).

The proposal is currently in the legislative process and is expected to be finalized by late 2025 or early 2026. While the timeline remains fluid, the direction is clear: thresholds are being raised, and reporting timelines are being extended to give companies more time to adapt.

Key Changes: Higher Thresholds and Extended Timelines

The most significant changes in Omnibus I center on two main areas: company size thresholds and reporting timelines.

Raising CSRD Thresholds

Currently, the CSRD applies to large companies defined as those with more than 250 employees OR over €50 million in annual revenue OR €25 million in total assets. Omnibus I proposes raising these thresholds substantially:

• Revenue threshold: from €50 million to €450 million
• Employee threshold: from 250 to 1,000 employees
• Asset threshold: proportional adjustment to approximately €225 million

These changes mean that many companies currently falling under mandatory CSRD requirements would be exempted. However, the devil is in the details: companies must meet ALL three criteria to be exempt. A company with €500 million in revenue but only 800 employees would still fall under the expanded threshold.

Postponing Wave 2 Reporting

Under the original CSRD timeline, Wave 2 companies (those with 250-500 employees, reporting on 2024 data) were required to begin mandatory reporting in 2026. Omnibus I proposes postponing Wave 2 by two years, moving the reporting start date to 2028 for 2026 fiscal year data.

This extension provides crucial breathing room for mid-sized companies to invest in systems, train staff, and develop robust data collection processes without the pressure of imminent deadlines.

Impact on Mid-Market Companies

For mid-market companies, Omnibus I creates a complex landscape with winners and losers. Understanding your position is critical.

Who Benefits from Omnibus I?

Companies with revenue between €50M and €450M and fewer than 1,000 employees may escape mandatory CSRD requirements entirely if the proposal passes unchanged. This exemption would significantly reduce reporting burdens and associated compliance costs.

Who Still Needs to Prepare?

Even if your company would be exempted under Omnibus I thresholds, you are not off the hook. Here's why:

• Supply chain pressure: If you supply products or services to large companies (Wave 1: 2024+ reporting), those companies are obligated to report Scope 3 emissions and supply chain impacts. They will increasingly demand detailed sustainability data from their suppliers. Companies without this data will face competitive disadvantages.
• Investor and banker expectations: Financial institutions and investors are embedding sustainability criteria into their decision-making processes. Companies without ESG data are viewed as higher risk and may face higher borrowing costs or difficulty accessing capital.
• Competitive advantage: First-movers in sustainability reporting are positioning themselves as market leaders. Companies that prepare early gain competitive advantage, improved brand reputation, and stronger relationships with customers and partners.
• Regulatory uncertainty: Omnibus I is not final law. Even if it passes, subsequent amendments may further adjust thresholds or add new reporting requirements. Companies that prepare now are insulated from sudden regulatory shocks.

The Simplified ESRS: A Game-Changer for Mid-Market

Running parallel to Omnibus I, the European Financial Reporting Advisory Group (EFRAG) released simplified ESRS standards in December 2025. These standards reduce the reporting burden for smaller companies while maintaining the integrity of double materiality assessment.

Key simplifications include:

• Reduced number of mandatory disclosure points
• Proportionate data collection and measurement requirements
• Phased implementation timelines for complex metrics
• Enhanced guidance for companies new to CSRD reporting

For mid-market companies, the simplified ESRS provides a practical pathway to sustainability reporting even if mandatory CSRD doesn't apply. Many companies are choosing to report using simplified standards voluntarily, gaining market advantage without full regulatory burden.

Why Companies Should Still Prepare Now

Despite the favorable changes in Omnibus I, we at Verdiso strongly recommend that mid-market companies begin CSRD preparation immediately. Here are four reasons why:

1. Supply Chain Advantage

Large companies begin reporting in 2024 and must include Scope 3 (supply chain) emissions. They are actively requesting emissions data from suppliers. Companies that can provide this data gain preferred supplier status, higher contract values, and stronger business relationships.

2. Financial Institution Requirements

Banks and investors increasingly require ESG data for credit decisions and investment analysis. Companies with verified sustainability data can access capital more easily and at better terms. This advantage compounds over time.

3. ESG Expectations from Customers

Consumer preferences are shifting toward sustainable products and services. B2B customers, particularly in Europe, increasingly evaluate sustainability performance during procurement. Being able to articulate your sustainability position is becoming a table-stakes requirement.

4. Regulatory Optionality

Omnibus I may not pass unchanged. Additional EU member states are considering national-level sustainability reporting requirements that may apply at lower thresholds. Companies that prepare now maintain optionality regardless of final regulatory outcomes.

Practical Next Steps

If you operate a mid-market company in Europe or supply to larger European companies, here's what we recommend:

• Clarify your threshold status: Calculate your exact headcount, revenue, and assets against both current and proposed Omnibus I thresholds. Determine whether you would be in scope under either scenario.
• Map your supply chain relationships: Identify customers, particularly those that are already Wave 1 reporters. Understand their sustainability data requirements.
• Assess current gaps: Compare your current ESG data collection against ESRS requirements. Identify where you have data, where you're missing it, and what systems would be required.
• Build your business case: Calculate the cost of compliance against the benefits: preferred supplier status, improved financing terms, competitive advantage, and risk mitigation.
• Engage external expertise: CSRD and ESRS compliance is technically complex and rapidly evolving. Engaging external advisors now can accelerate your readiness and reduce the risk of costly mistakes.

Verdiso's Approach: Start Early, Gain Advantage

At Verdiso, we believe that proactive preparation is the winning strategy. Whether or not Omnibus I passes, companies that begin their sustainability reporting journey early gain competitive advantage, build operational capabilities, and position themselves for success in an increasingly sustainability-focused business environment.

We help mid-market companies assess their regulatory position, understand their stakeholder requirements, and develop practical roadmaps for CSRD and ESRS implementation. Our approach is pragmatic and business-focused: we work with you to identify quick wins, build momentum, and establish robust processes that deliver value beyond regulatory compliance.

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