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Omnibus Package

Omnibus (published by the European Commission on 26 February 2025) has also resulted in several changes in the CSRD Directive that, in the European Commission’s view, will facilitate this directive’s implementation and reduce the administrative burden for enterprises:

• Reduction in the range of reporting companies: Reporting requirements will only apply to large enterprises with more than 1,000 employees (and, at the same time, a turnover higher than EUR 50 million or consolidated assets in an amount over EUR 25 million). This will result in a decrease in the number of companies, to which the CSRD applies, by approximately 80%. The new scope will be better harmonised with thresholds under the CSDDD Directive.
   
• “Value Chain Information Cap”: The Commission will prepare a voluntary reporting standard (VSME) for companies that will no longer fall under the CSRD (i.e. with fewer than 1,000 employees), the VSME being based on the standard for small and medium-sized enterprises developed by the EFRAG. This standard will protect smaller firms from excessive requirements for provision of information to large companies or banks that continue to be covered by the CSRD.
   
• Revision of the ESRS European standards: The Commission’s intention is to modify the ESRS in order to substantially reduce the number of required data points, to clarify unclear phrasings, and provide for enhanced consistency with other laws.
   
• Cancellation of sector standards: The proposal cancels the Commission’s authorisation to adopt sector-specific standards.
   
• Removal of the requirement for “reasonable assurance”: It will not be possible to transit from limited assurance to a higher review level (reasonable assurance).
   
• Postponed reporting duty: The reporting requirements for large undertakings and listed SMEs will be postponed by two years (Waves 2 and 3) to provide time to approve additional legislative changes.

Legislative proposals will not be considered and approved by the European Parliament and the Council. Changes in the CSRD, CSDDD and CBAM will come into force once an agreement is reached between legislators and the changes are published in the Official Journal of the EU.

Amendment to the Accounting Act

An amendment to the Accounting Act discussed as Parliamentary Press No. 783 extends the duty to prepare a sustainability report to a wider range of entities in compliance with the CSRD. This proposal has been in a legislative stage before the second reading in the Chamber of Deputies of the Czech Republic.

European Financial Reporting Advisory Group (EFRAG)

The EFRAG developed two sustainability standards for small and medium-sized enterprises (SME):

1. ESRS LSME (European Sustainability Reporting Standards for listed SMEs):

This standard is intended for SMEs, whose securities are traded on regulated markets in the EU. This simplified standard is based on the CSRD Directive and is to be adopted by the European Commission as a delegated act. The ESRS LSME is expected to come into force on 1 January 2026 with an optional two-year postponement for certain undertakings.

2. ESRS VSME (Voluntary Sustainability Reporting Standards for non-listed SMEs):

This voluntary standard is intended for SMEs, whose securities are not traded on regulated markets. The standard’s objective is to support those enterprises in providing sustainability information, namely in response to growing requirements from business partners and financial institutions. The EFRAG completed technical guidance for this standard in December 2024.

The European Commission is currently expected to adopt the ESRS LSME as a delegated act, while the ESRS VSME will remain a voluntary tool for non-listed SMEs.

Please feel free to contact us if you need more information about the ESG. We will be happy to help you.

Václav Tittelbach
tittelbach@clarksonhyde.cz