EU Sustainability Reporting: Latest Changes at a Glance

In Short

• The European Commission introduced the Omnibus Simplification Package to ease CSRD compliance.
• Reporting deadlines for large private firms and listed SMEs are delayed by two years.
• Ireland updated its laws to match EU changes and expand exemptions for subsidiaries.

The European Commission has introduced changes to the Corporate Sustainability Reporting Directive (CSRD) to make it easier for companies to comply.

Many businesses, auditors, and EU member states had raised concerns about how complex and burdensomethe reporting requirements were.

In response, the Commission introduced the Omnibus Simplification Package, which includes proposed changes to the CSRD, the Corporate Sustainability Due Diligence Directive (CSDDD), and the EU Taxonomy.

What's the goal?

The goal is to reduce complexity and reporting pressure, especially on smaller companies.

One of the most important updates is the proposal to delay the CSRD reporting timelines for many companies. Companies are grouped into different “waves” based on size and listing status.

While Wave 1 companies (large listed firms) must continue reporting from 2025, the reporting start dates for Wave 2 companies (large private firms) and Wave 3 companies (listed SMEs) have been postponed by two years.

These changes were officially adopted through the Stop the Clock Directive, which must be applied in national laws by the end of 2025.

The definition of a “large undertaking” has also been changed. Earlier, a company was consideredlarge if it met two of the following three criteria: 250 employees, €50 million in turnover, or €25 million in total assets.

Under the new rules, a company must have at least 1,000 employees and meet one of the financial thresholds. This revision removes 75–82% of companies from CSRD requirements and is expected to save businesses over €6 billion.

To help Wave 1 companies, the Commission introduced a “Quick Fix” Delegated Act. This measure gives companies more time to meet some of the more complex requirements under the European Sustainability Reporting Standards (ESRS).

It postpones specific reporting obligations like detailed value chain disclosures and certain environmental and social metrics for two years.It also expands the phase-in provisions, so even large companies with more than 750 employees can now gradually meet new reporting expectations.

In Ireland, the government has updated national laws to match these EU-level changes. The 2025 regulations clarify that companies previously considered “large” because they were “ineligible entities” (like insurers or listed firms) will no longer automatically fall under CSRD reporting rules unless they meet the employee or financial thresholds.

The regulations also expand exemptions for Irish subsidiaries of EU parent companies and make it easier for group reports prepared in other EU countries to be accepted in Ireland, reducing duplicate efforts.

The Irish law also confirms that non-EU (third-country) groups must have at least €150 million in EU turnover over two years to be required to report. It clarifies how Irish branches of these companies are treated under the law, improving legal certainty. However, some uncertainties remain, especially for companies with complex structures, which may still need to report depending on their specific case.

Ends/

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Source: Pinsent Masons