Upright’s take: The EU’s Omnibus is slashing CSRD reporting requirements. Will this help the continent compete – or just weaken sustainability efforts?

What we know from the EU’s latest Omnibus announcement

On February 26, 2025, the European Commission announced a new package of proposals under the Omnibus Regulation, aiming to simplify sustainability reporting, EU Taxonomy requirements, and due diligence obligations.

Key changes include:

• Reducing the scope of the CSRD: Around 80% of companies will be removed from CSRD requirements, limiting mandatory sustainability reporting to the largest companies.
• Postponing reporting deadlines: Companies that were originally required to report in 2026 or 2027 will now have until 2028.
• Easing EU Taxonomy reporting: The requirements will now focus on the largest companies, with reduced reporting templates and financial materiality thresholds introduced.
• Simplifying due diligence obligations: Companies will only need to conduct systematic due diligence on direct business partners, and the frequency of assessments will be reduced.
• Adjusting the Carbon Border Adjustment Mechanism (CBAM): Small importers will be exempt from CBAM obligations, simplifying compliance for SMEs.

So what should we make of this? What are the real-world consequences?

Upright’s stance: Regulatory burden is a real issue – but Omnibus has a big blindspot

The EU's approach to simplifying CSRD through Omnibus focuses primarily on reduction – fewer companies, fewer requirements, longer timelines. But we believe this misses a critical opportunity.

The original vision of CSRD – providing comparable and decision-useful data about companies’ material impacts, risks and opportunities to various stakeholders – wasn't the problem. We really do need information about both companies' impacts on the surrounding world, but also external risks and opportunities impacting companies’ finances.

The problem with CSRD was poor implementation with an oversized emphasis on documenting and auditing internal processes and writing narrative descriptions for policies and actions. And we shouldn't abandon a powerful concept just because its execution was flawed.

When sustainability reporting becomes less structured and less comparable between companies, it actually becomes less useful. Investors, regulators, and other stakeholders struggle to extract meaningful insights from inconsistent data, ultimately creating more work for everyone involved.

The two pillars for effective simplification of CSRD

So what's the alternative? We see two key pillars for effective simplification:

1. Technology-enabled efficiency: Modern data solutions can automate what once took months of manual work. This isn't theoretical – it's happening now, with external data providers like Upright dramatically reducing the burden of reporting while maintaining, or even improving, quality. If the EU aims to catch up its economic competitors in the innovation game, it should be accelerating the transition towards modern technological solutions rather than scaling back ambitions just because traditional, manual approaches were burdensome.
2. Play to strengths: Let's challenge the assumption that companies must generate all sustainability data internally. Companies should focus on what they know best, such as core business disclosures, transition metrics, and qualitative descriptions of major impacts, while specialised data providers deliver the quantitative impact measurements that companies struggle to produce.

The choice isn't between sustainability and competitiveness. With the right approach, we can deliver both.

The role of external data providers

At Upright, we’ve observed firsthand the value that third-party data providers – also other than us – have in producing usable, comparable, and high-quality information on companies' largest sustainability impacts, risks, and opportunities.

Based on our experience working with 300+ businesses and financial institutions, we’ve found that:

• Companies are well-positioned to report on:
  • Basic disclosures: core business, geography, transition metrics (CapEx, OpEx), and financials
  • Their largest impacts and risks in qualitative terms
  • What they are doing to improve those impacts, mitigate risks and track progress
• Companies are not well-positioned to:
  • Quantify their largest real-world impacts on their own. While qualitative descriptions are manageable, meaningful quantitative metrics are extremely time-consuming if done properly.

We don't claim to have all the answers, but we do believe external data providers can offer perspectives that can help steer the discussion in a constructive direction.

What Upright can currently offer is:

• Scalable double materiality assessments for tens of thousands of companies – eliminating the need for time-consuming internal projects or expensive consultant exercises
• Robust data on companies' impacts in the big picture through our proprietary product- and services-based net impact data
• Standardised methodologies that ensure comparability across companies and sectors

Bottom line: smarter and lighter – but not less ambitious

Sustainability reporting should not be about adding unnecessary bureaucracy. But it should also not be about scaling back sustainability ambitions without a plan for how decision-useful data will be produced instead. The right path forward is to rethink how reporting is done: making it clearer, smarter, and more technology-enabled.

At Upright, we care deeply about the Omnibus debate as our mission is to incentivise companies to optimise their net impact – maximise benefits for people and the planet while minimising costs to them.

This can only happen if reporting is done efficiently, without draining resources that should go toward real improvement work.

We believe that regardless of Omnibus changes, double materiality remains business-critical. Those who maintain visibility into both their impacts on the world and the world's impacts on their bottom line will be the ones who thrive in an increasingly volatile future where not regulators, but investors, customers, and talent demand accountability.

Writers:
Lisa Jackson, Head of Impact Analysis
Markus Weckman, VP, Corporates