IDW publishes questions and answers on the EU Commission's Omnibus proposal

On February 27, 2025, the IDW published a comprehensive question-and-answer paper (Q&A) on the European Commission's new omnibus proposal on sustainability reporting. The paper provides an initial analysis of the planned changes and their impact on companies and sustainability auditors. The background to this is the proposals of the EU Commission of February 26, 2025 to amend the Corporate Sustainability Reporting Directive (CSRD) and other regulations (so-called Omnibus Package). The aim of the planned changes is to simplify sustainability reporting for companies while reducing the regulatory burden.

The Omnibus proposal consists of two separate guideline proposals:

• COM(2025)80: intended to postpone the introduction of the reporting requirement for certain companies by two years.
  

• COM(2025)81: contains proposed amendments to the CSRD and the CSDDD (Corporate Sustainability Due Diligence Directive), in particular to reduce reporting requirements.
  
  

Key points of the IDW F&A paper

In its F&A paper, the IDW analyzes the European Commission's key proposed amendments and their impact on companies and auditors in a total of 17 questions covering the three main areas of mandatory sustainability reporting, auditing of sustainability reporting and timely implementation of sustainability reporting. The following topics, among others, are covered:

• Redefinition of the scope of the CSRD: adjustment of the criteria for which companies are required to report on sustainability (1,000-person limit for employees, increase in the thresholds for non-EU companies).
  
• Relief for reporting on the value chain: Reduction of data collection requirements to make it easier to implement in practice (especially for companies with fewer than 1,000 employees in the value chain).
  
• European reporting standards ESRS: Sector-specific ESRS will be abandoned; in addition, the existing ESRS are to be revised with the aim of significantly reducing the data points.
  
• Tagging: Electronic tagging will not be mandatory until a corresponding delegated regulation is issued.
  
• New rules for taxonomy reporting: Clarification and adaptation of requirements to make them easier to implement: Reporting requirement only from a turnover of EUR 450 million and further modifications with regard to content.
  
• Changes regarding the audit of sustainability reporting: Possible adjustments to the audit standards, particularly with regard to the scope and methodology of limited assurance; no expansion to an audit with reasonable assurance. The content of the audit opinion itself is not to be changed, nor are the requirements for a sustainability auditor.
  
• Postponement of implementation: Extension of the transition periods to give companies more time to implement the new requirements (so-called “second wave” companies are to be required to report for financial years beginning on or after January 1, 2027; so-called “third wave” companies are to be required to report for financial years beginning on or after January 1, 2028).
  

The IDW's F&A paper serves as a guidance for auditors and companies to better understand the planned regulatory changes. It clearly shows which companies are to be affected and which simplifications are planned.

The European Commission's proposals will now go through the EU legislative process in the Parliament and Council. Adjustments are possible before the new regulations come into force. Companies should follow developments closely in order to be able to react to new requirements in good time. However, since the requirements for sustainability reporting for large capital-market-oriented companies in Germany are not expected to change, national legislators are still called upon to implement the German version of the CSRD, which came into force in 2023, as soon as possible so that the necessary legal certainty for companies and their auditors can be created as quickly as possible in this area at least.