Last week, the European Commission introduced a package of measures aimed at initiating a review and simplification of regulations to reduce administrative burdens while ensuring the implementation of the Green Deal does not hinder economic growth.

With a focus on reducing reporting requirements, the so-called Omnibus package is assessing the following measures:

Simplification of Reporting Requirements

The Omnibus package aims to reduce complexity and bureaucratic burdens for companies, particularly smaller enterprises or those in high-emission sectors. It introduces limits on the information that companies or banks, under the scope of the Corporate Sustainability Reporting Directive (CSRD), can request from companies in their value chains with fewer than 1,000 employees. This could lead to a narrowing of certain regulations, easing reporting obligations while maintaining the focus on sustainability objectives.

Amendments to the CSRD

• Two-year deferral of reporting obligations for all companies except for public interest entities already required to report under the European Sustainability Reporting Standards (ESRS).
• Reporting obligations would apply only to large enterprises with more than 1,000 employees, defined as those exceeding 1,000 employees and generating a net turnover of €50 million and/or a total balance sheet of €25 million. This would reduce the number of companies subject to CSRD by approximately 80%.
• For companies that will no longer fall under the CSRD framework (up to 1,000 employees), the Commission pledges to reduce required data, clarify ambiguous provisions, and improve consistency with other legislative acts.
• The proposal also eliminates the Commission’s power to adopt sector-specific reporting standards.

Amendments to the Corporate Sustainability Due Diligence Directive (CSDDD)

The CSDDD, which requires companies to monitor their supply chains to ensure compliance with human rights and climate targets, may see:

• A one-year postponement of implementation.
• A reduction in scope and modification of legal liability requirements.

Revision of the EU Taxonomy

Potential adjustments include:

• Introduction of new categories or simplifications to clarify which activities are classified as “green” and how businesses can align with these criteria.
• A reduction in the reporting burden, limiting EU taxonomy reporting obligations to larger companies (aligned with the CSDDD scope).
• Smaller companies would be exempt, but large firms under the future CSRD scope could voluntarily report on taxonomy compliance, offering cost savings while still enabling access to sustainable finance.
• Introduction of a financial materiality threshold, reducing the number of reporting models by approximately 70%.

Simplification of the Carbon Border Adjustment Mechanism (CBAM)

The proposal would exempt small importers—mainly SMEs and individuals—from CBAM obligations by introducing a new cumulative annual CBAM threshold of 50 tons per importer. This would eliminate CBAM obligations for about 90% of importers, primarily SMEs, while still covering over 99% of emissions. Additional simplifications for companies remaining under CBAM would include:

• Streamlined authorization processes for CBAM declarants.
• Simplified rules for emissions calculation and reporting obligations.

Impact on Italian Companies

As a result of the above changes, many Italian companies currently subject to mandatory reporting in 2026 under Legislative Decree No. 125/2024 (companies with more than 250 employees and/or a net turnover of €50 million and/or a total balance sheet of €25 million) will likely be excluded under the Omnibus provisions. They will instead have the option to report voluntarily under the Voluntary Sustainability Standards for SMEs (VSME) developed by EFRAG.

However, the principle of “double materiality” remains confirmed—meaning companies must consider both:

1. The impact of their activities on the environment and society (environmental and social materiality).
2. How environmental and social factors affect their business (financial materiality).

Balancing Bureaucratic Reduction and Climate Commitments

Overall, the Omnibus package seeks to strike a balance between reducing regulatory burdens and upholding the EU’s climate commitments, in line with the Paris Agreement. It also reaffirms that voluntary sustainability reporting should be viewed as a competitive advantage, embedded in strategic planning for long-term business resilience.