06
Fri, Jun
86 New Articles

The Omnibus Package

Slovakia
Tools
Typography
  • Smaller Small Medium Big Bigger
  • Default Helvetica Segoe Georgia Times

Following the criticism of the current state of regulatory burden in The Future of European Competitiveness report by Mario Draghi (issued in September 2024) and in the Budapest Declaration by the European Council which called upon European Commission to reduce reporting requirements by at least 25 % in the first half of 2025 (issued in November 2024) the European Commission announced a series of so-called “Omnibus” simplification packages.

In April 2024 the European Commission adopted the first such directive amending the EU Corporate Sustainability Reporting Directive No. 2022/2464 (CSRD) and EU Corporate Sustainability Due Diligence Directive No. 2024/1760 (CSDDD), effectively alleviating the reporting burden by postponing and descoping the ESG and sustainability reporting obligations.

“Stop the clock”

This first part of the Omnibus package called “stop-the-clock” directive is now effective and reduces the number of companies in the EU affected by the CSRD and CSDDD. These measures are intended to allow more time for EU bodies to properly develop implementing regulations, for national legislatures to develop national legislation and for businesses to adapt to proposed changes in sustainability regulation.

CSRD

The CSRD specifies the dates from which companies of certain sizes and significance are required to produce ESG and sustainability reporting.

The first wave of reporting in respect to 2024 financial year concerning public-interest entities remains unchanged by the Omnibus package.

The second wave of reporting concerning non-public-interest large companies is postponed by two years compared to the original reporting obligation and the first reports are scheduled to be made with respect to the 2027 financial year.

The third wave of reporting concerning listed SMEs is postponed by two years compared to original reporting obligation and the first reports are to be made with respect to the 2028 financial year.

CSDDD

The first wave of regulation regarding reporting on human rights and environmental impacts was originally intended to be adopted by the member states by 2027 according to the CSDDD. This deadline is postponed by one year in order to give companies more time to prepare for the requirements of CSDDD and to provide them with the opportunity to take into account the guidelines to be issued by the European Commission on how the companies should fulfil their due diligence obligations in practise.

Proposals

Ambitious and significant changes to currently planned ESG reporting obligations are considered with regard to alleviating the threshold criteria for companies which would be required to comply with CSRD:

  • Higher Employee Threshold: the number of employees required for mandatory compliance could be raised from 250 employees to 1,000 employees.
  • Higher Financial Thresholds:The revenue threshold for mandatory compliance could increase from €40 million to €50 million.
  • Higher intra-EU revenue threshold for non-EU established companies:The revenue threshold for non-EU companies could increase from €150 million to €450 million.
  • Simplification of Reporting: The changes are designed to simplify reporting obligations, especially for smaller businesses. By reducing the scope of companies required to report, it eases the burden on those that might struggle with the detailed ESG reporting obligations.

These proposed changes described above would effectively exclude SMEs from reporting obligations and reduce the number of companies under reporting obligations by up to 80 %. It is also considered that companies would be encouraged to comply with the reporting obligations voluntarily in order to increase their ESG rating and be more “green” or “blue” in the perspective of loan providers, business partners or consumers.

With these changes the regulatory burden on companies should be effectively alleviated. Given the fact that the EU directives implementing major regulations and reporting obligations are being amended even before becoming effective (and before being accompanied by proper implementing regulations), businesses are constantly forced to navigate through this unpredictable environment and to reassess its internal ESG policies, conduct risk assessments, and establish robust reporting systems.

By Bernhard Hager and Annamaria Tothova, Partners, and Vojtech Laga, Principal Associate, Eversheds Sutherland

Eversheds Sutherland at a Glance

Eversheds Sutherland with offices in Bratislava and Prague and as part of an international network, provides comprehensive legal advice also in foreign jurisdictions.

Our team consists of a total of more than 40 lawyers in the Czech Republic and Slovakia, most of whom have previously worked at major international and local law firms and have extensive experience in particular in the areas of corporate law, including mergers and acquisitions, capital markets, real estate, employment law, competition law, litigation and arbitration, energy, infrastructure, as well as environmental and ESG law.

Our advisory services are offered in Slovak, German, Czech and English language. Members of our team include attorneys registered with the Austrian Bar Association. On this basis, and because we are part of Eversheds Sutherland, we are also able to offer extensive legal support on various foreign legal issues.

We listen to our clients, we understand their business and we also understand what they need. So we can always find the best solution for the particular situation. We work quickly, efficiently and take responsibility for our work.

Firm's website.