Strategic sustainability: Preparing your business for EU Omnibus simplification
The EU Omnibus Simplification Package proposes significant changes to corporate sustainability regulations, providing both opportunities and challenges. Ahead of the vote in Strasbourg on April 1st, companies should proactively manage their sustainability commitments and strategic priorities.
1. Maintain commitment to sustainability
Sustainability remains critical for financial resilience, competitive advantage, and long-term growth. Integrating sustainability into financial and strategic planning helps businesses manage sustainability-related risks, from regulatory shifts to operational disruptions, and positions them favourably in the market.
2. Assess new regulatory scope
Evaluate your company's position relative to the revised CSRD thresholds. Even if newly exempt, voluntary reporting remains beneficial for maintaining stakeholder trust and competitive differentiation.
3. Strategically manage Impacts, Risks, and Opportunities (IROs)
Adopt a structured IRO approach to identify and prioritise material sustainability issues, aligning sustainability efforts with long-term business objectives. This allows businesses to manage risks effectively and capitalise on opportunities for innovation, cost savings, and market differentiation.4. Monitor legislative developments
Stay updated on evolving EU legislative processes and national regulatory responses. Maintaining flexibility and preparedness for various scenarios helps companies respond swiftly to any regulatory changes.
5. Leverage technology
Invest in digital solutions to streamline sustainability data management, enhancing reporting accuracy, and enabling real-time insights. Technology enhances strategic and operational efficiency.
6. Strengthen governance and data integrity
Enhance internal governance structures and internal controls for sustainability oversight, ensuring accurate, reliable sustainability disclosures. Strong governance frameworks build stakeholder trust and readiness for potential future regulatory obligations.
7. Engage actively with stakeholders
Continue transparent communication and active engagement with investors, customers, employees, and supply chain partners. Consistent stakeholder engagement preserves trust, reputation, and credibility, especially in periods of regulatory uncertainty.
8. Prepare for voluntary sustainability disclosures
If exempt from mandatory reporting, continue voluntary sustainability disclosures using recognised frameworks like GRI, ISSB, or TCFD. Demonstrating ongoing accountability and progress helps sustain market confidence and competitive advantage.
9. Utilise the Voluntary Standard for SMEs (VSME)
Micro, small, and medium-sized enterprises can adopt the Voluntary Standard for SMEs (VSME), developed to support companies not covered by CSRD. This standard helps smaller undertakings meet the sustainability information demands of larger corporate clients, banks, and investors, enhancing their competitive growth and resilience. Using VSME can streamline sustainability reporting, enabling SMEs to contribute effectively to a more sustainable and inclusive economy.
Conclusion
By proactively embedding these recommendations into their strategic approach, companies can effectively navigate the changing regulatory landscape, positioning themselves strongly for future sustainability compliance, competitive differentiation, and long-term success.
Future Planet: Your partner in sustainability
For forward-thinking companies, ESG presents significant opportunities to enhance their competitive edge. By proactively identifying and acting on these opportunities, businesses can:
- Innovate new products that cater to the growing demand for sustainable alternatives.
- Optimise resource use, reducing costs and improving operational efficiency.
- Strengthen stakeholder relationships by demonstrating transparency and leadership in sustainability efforts.
From expanding into new markets to embracing renewable energy solutions, companies that embed ESG into their long-term strategies can unlock growth opportunities while contributing positively to society and the planet.
Frequently Asked Questions (FAQs)
Here are some FAQs related to the Omnibus:
What is the CSRD Omnibus proposal?
The CSRD Omnibus proposal outlines changes to the Corporate Sustainability Reporting Directive (CSRD) and EU Taxonomy, including broader company eligibility and reduced reporting requirements.
Which companies are affected by the proposed changes?
The proposal increases the employee threshold from 250 to 1000 employees, while maintaining criteria for revenue over €50 million or a balance sheet value over €25 million.
What are examples of ESG-related impacts?
ESG impacts can include environmental damage such as pollution or resource depletion, social issues like labor practices or community relationships, and governance challenges such as ethical decision-making and regulatory compliance.
What are the main changes to CSRD reporting?
Key changes include removing sector-specific standards, limiting assurance to "Limited Assurance," reducing the number of data points, and postponing reporting deadlines for some companies.
Will EU Taxonomy become mandatory?
No, under the proposal, companies with revenue below €450 million can opt-in voluntarily to the EU Taxonomy framework.
When will these changes take effect?
The Omnibus proposal is still under review and may be adopted by the end of 2025, following multiple rounds of negotiation in the European Parliament and Council.
How can Future Planet help?
Future Planet is the platform that accelerates your ESG performance. From Double Materiality Assessments to CSRD, to carbon accounting and transition planning, we accelerate impact and compliance.
For expert guidance, contact Future Planet today by emailing eva@futureplanet.com.
