Large companies already reporting under CSRD (“Wave One”) can delay new sustainability disclosures—including biodiversity and Scope 3—until FY 2027.
Firms with fewer than 750 employees may omit reporting on multiple ESG topics through FY 2026.
The EU aims to cut CSRD reporting datapoints by two-thirds as part of a broader regulatory rollback under the Omnibus I package.
The European Commission has adopted a set of “quick fix” amendments to the European Sustainability Reporting Standards (ESRS), granting large companies a two-year delay in disclosing additional ESG-related data under the Corporate Sustainability Reporting Directive (CSRD).
The move targets so-called “Wave One” companies—those already required to report on FY 2024—who were previously expected to expand their disclosures over the next two years. The amendment allows these firms to maintain the same level of reporting through FY 2026, effectively freezing the addition of new obligations during the Commission’s broader review of the ESRS.
“This quick fix was necessary because Wave One companies were not captured by the ‘Stop-the-clock’ Directive,” the Commission noted.
Relief for Large and Mid-Sized Enterprises
The amendments include several tiered relief measures:
All Wave One companies may defer reporting on the anticipated financial effects of certain sustainability-related risks through FY 2026.
Companies with fewer than 750 employees may omit disclosures on Scope 3 GHG emissions, biodiversity, own workforce, workers in the value chain, affected communities, and end users.
Companies with more than 750 employees will now receive most of the same phase-in benefits as smaller firms. However, Scope 3 emissions remain a required disclosure for these larger entities.
RELATED ARTICLE: European Commission to Withdraw Greenwashing Regulation
Broader CSRD Scope Shrinking
These technical amendments come amid the Commission’s broader Omnibus I regulatory reform, aimed at reducing the CSRD’s reach and complexity. Originally, the CSRD was set to apply to:
Public interest companies with over 500 employees (starting FY 2024)
Companies with more than 250 employees or €50 million in revenue (FY 2025)
Listed SMEs (FY 2026)
However, the Omnibus initiative proposes raising the reporting threshold to firms with over 1,000 employees, with some lawmakers advocating even higher limits. The European Financial Reporting Advisory Group (EFRAG)—tasked with developing ESRS technical advice—is targeting a two-thirds reduction in reporting datapoints.
The Commission emphasized that the broader ESRS review aims to “substantially reduce the number of data requirements, clarify provisions deemed unclear, and improve consistency with other legislation.”
This review is expected to be finalized by financial year 2027, meaning companies may never be required to provide the additional disclosures originally scheduled for the second and third years of CSRD implementation.
A Reset for Sustainability Reporting
These changes represent a significant regulatory reset for corporate sustainability reporting in Europe. By reducing short-term pressure on businesses and potentially narrowing the CSRD’s scope, the EU is recalibrating its ESG ambitions to balance corporate burden with long-term climate and social goals.
Follow ESG News on LinkedIn
