For two years, large European corporations built compliance infrastructure for the Corporate Sustainability Reporting Directive (CSRD): double materiality assessments, value chain data pipelines, assurance-ready disclosures. On 24 February 2026, the Council of the European Union adopted the Omnibus I package and the European Commission estimates that around 80% of companies originally captured by the CSRD are now outside its scope.
If your organization is among those that remain in scope – companies with more than 1,000 employees and either €50 million in net turnover or €25 million in balance sheet total – the question is no longer whether you must report: it’s how to report under a regime that has been narrowed, simplified, and recalibrated. The strategic risk is not non-compliance; it’s wasted investment and lost narrative ground while less-burdened competitors move first.
What “Still in Scope” Actually Means in 2026
The revised CSRD applies to the largest companies, those most likely, in the European Commission’s framing, to have material impacts on people and the environment. For these organizations, three operational realities have changed:
1. The reporting set is leaner. The draft revised European Sustainability Reporting Standards (ESRS), reducing mandatory data points by more than 60% and total data points by more than 70%. The EU Commission expects per-company reporting costs to fall by more than 30%.
2. The assurance bar held steady. Limited assurance remains the standard. The previously anticipated move to reasonable assurance has been removed from the timetable.
3. The timeline is firm but later. First application is required for financial years beginning on or after 1 January 2027, with first reports due in 2028.
Rationalizing Sunk Investment — Re-deployment, not Dismantlement
The most common error in the weeks following Omnibus I adoption has been treating the simplification as a reason to stand down sustainability programs entirely. For corporations still in scope, this is exactly the wrong response.
Sustainability infrastructure built under the original CSRD, such as emissions accounting systems, supplier data flows, and governance documentation remains directly usable under the revised ESRS. The 60%+ reduction in mandatory data points does not mean 60% of past work is wasted, instead it means the remaining disclosures can be delivered with greater rigor, better data quality, and a clearer narrative.
We recommend three practical moves to take now:
- Map existing data points to the simplified ESRS as soon as the European Commission adopts the delegated act (expected within six months of Omnibus I’s entry into force on 18 March 2026).
- Reallocate – don’t cut – internal sustainability headcount. Teams freed from data point mechanics should pivot to strategy, transition planning, and stakeholder engagement.
- Preserve double materiality outputs. Even where specific disclosures are removed, the underlying assessment work supports investor communications, ratings agency engagement, and Corporate Sustainability Due Diligence Directive (CSDDD) readiness.
Using the Value Chain Cap Deliberately
One of Omnibus I’s most consequential provisions for large corporations is the value chain cap. CSRD-bound companies cannot require value chain partners with 1,000 employees or less to provide sustainability information beyond what is set out in the new voluntary standard for small and medium-sized (SME) undertakings, which the European Commission is finalizing based on European Financial Reporting Advisory Group (EFRAG’s Voluntary Standard for Small / Medium-Sized Enterprises (VSME).
For large corporations, this cap is both a constraint and a strategic instrument: it’s a constraint in that existing supplier questionnaires likely overshoot the cap. They will need to be redesigned to the voluntary standard’s basic and comprehensive modules. The cap may be viewed as an instrument, as suppliers who would otherwise resist data requests now have a clear, EU-endorsed framework. Standardizing requests around the voluntary standard reduces friction and improves response rates.
The European Commission has clarified that the cap applies only to CSRD reporting purposes. Companies may still request additional information from suppliers for commercial, risk, or contractual reasons, provided those requests are not framed as CSRD obligations.
The Corporate Sustainability Due Diligence Directive (CSDDD) Recalibration
The CSDDD has been delayed and softened, but not dismantled. Per the Omnibus I package, Member State transposition is required by 26 July 2028, with application from 26 July 2029. The maximum financial penalty has been reduced from at least 5% to no more than 3% of global net turnover.
For procurement, legal, and risk teams, this means:
- Due diligence program design should continue, but with a 2029 operational target rather than 2027.
- Civil liability provisions have been adjusted , companies should track national transposition closely via EUR-Lex, as Member States retain discretion in implementation.
- Existing human rights and environmental due diligence work (under the United Nations Guiding Principles on Business and Human Rights or the Organisation for Economic Co-operation and Development Guidelines) remains the foundation. Omnibus I did not change those baselines.
The Narrowed Field Is the Strategic Field
Omnibus I created a smaller, more focused CSRD population. For the large corporations still in scope, this is not a retreat but a concentration of attention from regulators, investors, and the public. Reporting under the simplified ESRS in 2028 will be more visible, not less, precisely because fewer companies are doing it.
The large companies that treat this period as a strategic reset – rationalizing investment, deploying the value chain cap deliberately, and continuing CSDDD readiness on the revised timeline – will set the standard that the next cohort will eventually catch up to.
Blue Sky Climate works with large corporations to translate EU sustainability policy into operational playbooks. To discuss how Omnibus I affects your reporting strategy, book a free consultation today.
