In recent years, several policy publications – including the Commission's Better Regulation Agenda (2021), the Draghi Report on the Future of European Competitiveness (2024), and the Commission's Competitiveness Compass (2025) – have voiced concerns and proposed measures to ensure that regulatory requirements do not hinder the EU's competitiveness.

To address this, the Commission has stated its intention to establish a series of initiatives, including efforts to simplify and streamline several ESG regulations stemming from the EU Green Deal – most importantly, the CSRD, CSDDD and Taxonomy Regulation – while maintaining the Green Deal's policy objectives.

The Commission's plans to amend the CSRD, CSDDD and Taxonomy Regulation are being widely discussed among national governments, businesses, legal scholars, NGOs, civil society organisations and other stakeholders. While some advocate far-reaching amendments to reduce regulatory burdens, others express concerns about: (i) the potential use of this process to reopen legislation to political renegotiation, (ii) a lack of proper consultation, and (iii) the risk of mistaking efforts to reduce overlapping reporting requirements with a weakening of the due diligence requirements under the CSDDD.

Dutch government commitment

The Dutch government endorses the plans for reducing regulatory burdens, in line with the coalition agreement. It seeks to focus on eliminating duplicate and unnecessarily complex reporting obligations in the CSRD and CSDDD. The government also intends to assess further proposals on their own merits, while ensuring legal certainty for companies.

On 30 January 2025, two motions were tabled in the lower house of parliament. The first motion acknowledged that many companies have already prepared for the existing rules and emphasised that any adjustments should provide relief without drastically altering the regulatory framework. In this context, the government was asked to advocate within the EU that the CSRD and CSDDD be simplified, while safeguarding key sustainability objectives and ensuring that companies that have already invested in compliance are not disadvantaged. This motion was postponed.

The second motion called on the government to work within the EU towards an agreement that provides certainty to companies that have already invested in sustainability and prevents their prior efforts from being undermined. This motion was adopted.

Publication of Omnibus Proposal

On 26 February 2025, the Commission published its "Omnibus Proposal" for a directive amending Directive 2006/43/EC, 2023/43/EC, 2023/34/EU, (EU) 2022/2464 and (EU) 2024/1760 concerning certain corporate sustainability reporting and due diligence requirements, and a separate proposal postponing the application of some reporting requirements in the CSRD and the transposition deadline and application of the CSDDD. These proposals are accompanied by a Q&A.

In this article, we provide insights into the key proposed changes to the CSRD, CSDDD and Taxonomy Regulation, examine their impact on the Dutch process of implementing existing regulations, and highlight the key consequences for companies.

Proposed CSRD amendments

Scope

The Omnibus Proposal includes amending the scope of the CSRD by aligning it more with the CSDDD's scope. This means the new requirements will only apply to:

• "large" companies with more than 1000 employees on average (that is, companies having more than 1000 employees and either a turnover above EUR 50 million or a balance sheet above EUR 25 million); and
• parent companies of a "large" group with more than 1000 employees on average on a consolidated basis.

As a result, the number of EU companies subject to the requirements will be reduced by 80%.

The Omnibus Proposal also modifies the size criteria for the Article 40a reporting requirement. Under this requirement, (i) subsidiaries in the EU (meeting the criteria of a "large" company), or (ii) in the absence of such a subsidiary, branches in the EU generating a certain net turnover within the Union, must publish a mitigated sustainability report at the level of their third-country parent company. For this reporting requirement to apply, the net turnover threshold for third-country parent companies in the EU has gone up from EUR 150 million to EUR 450 million. The threshold for the EU branch under article 40a is raised from EUR 40 million to EUR 50 million.

For companies not subject to the CSRD under these new rules, the Commission advocates voluntary reporting by proposing a proportionate reporting standard for voluntary use (voluntary ESRS) which would be based on the VSME standards. These standards are designed to align with the scale and complexity of smaller companies and are currently being developed by EFRAG, the advisory body responsible for preparing the sustainability reporting standards (ESRS). The Commission will ultimately adopt these voluntary ESRS through a delegated act. In the meantime, to address market demand, the Commission intends to issue a recommendation on voluntary sustainability reporting as soon as possible, based on the VSME standard developed by EFRAG.

Sustainability reporting standards

The Commission intends to adopt a new delegated act to revise the current delegated act with sector-agnostic ESRS, as soon as possible, and no later than six months after the final Omnibus directive enters into force. The Commission has already indicated that this revision will substantially reduce the number of mandatory ESRS data points by (i) removing those deemed least important for general purpose sustainability reporting, (ii) prioritising quantitative data points over narrative text and (iii) further distinguishing between mandatory and voluntary data points, without undermining interoperability with global reporting standards and without affecting the materiality assessment of each company. The Commission has confirmed that the double materiality principle will stay in place.

To prevent an increase in the number of prescribed data points that companies must report, the Commission’s authority to adopt sector-specific standards has been removed. This means that companies will not need to comply with any additional ESRS beyond the sector-agnostic ESRS that are to be revised.

Obtaining information from value chain – value chain cap

The Omnibus Proposal aims to ease reporting burdens for companies in the value chain that fall outside the CSRD’s scope. It does so by stipulating that companies in the value chain with no more than 1000 employees should not be asked for information beyond what is specified in the voluntary ESRS, expect for information that is commonly shared between companies (value chain cap).

The Omnibus Proposal states that assurance providers should prepare their assurance opinion respecting the value chain cap.

Assurance standards and guidelines

The Omnibus Proposal eliminates the deadline for the Commission to adopt limited assurance standards via a delegated act, but adds that the Commission must develop targeted assurance guidelines by 2026. These guidelines will specify procedures for assurance providers in their limited assurance engagements, in anticipation of the assurance standards.

Furthermore, although the CSRD currently authorises the Commission to establish reasonable assurance standards by 1 October 2028, the Omnibus Proposal removes this provision, effectively capping the assurance provider's review at the limited assurance level.

Marking up sustainability reporting

The Omnibus Proposal proposes replacing current Article 29d of the Accounting Directive by a new provision specifying that companies are not required to mark up their sustainability reporting until a delegated act for the digital marking up of sustainability reporting is adopted.

Article 33(1) of the Accounting Directive is amended to specify that the collective responsibility of board members as regards the digitalisation of the management report is limited to its publication in the single electronic format, including the digital marking up.

Proposed timing

The Omnibus Proposal removes the 2024 financial year reporting requirement. Instead, it delays the application of the CSRD for all companies in scope of the new requirements, to the 2025 financial year. This seems to imply that if the Dutch legislature were to implement the current CSRD with retroactive effect, "first wave" companies would be required retroactively to comply with the CSRD, while subsequently, upon the implementation of the Omnibus Proposal, being exempted from this requirement again, with retroactive effect.

A separate proposal introduced parallel to the Omnibus Proposal seeks to postpone (by two years) the application start date of the current CSRD requirements for the "second wave" (all large companies and all parent companies of large groups, not in scope of the firsts wave of reporting, i.e. financial year 2024) and the "third wave" (listed SMEs, small and non-complex credit institutions, and captive insurance and reinsurance companies). These postponements aim to avoid a situation in which certain companies are required to report for the 2025 (second wave) or 2026 (third wave) financial year and are then relieved of this requirement under the Omnibus Proposal once it enters into force.

The Commission therefore invites the Parliament and the EU Council to reach rapid agreement on that postponement, in particular to provide the necessary legal clarity for companies in the second wave that are currently required to report for the first time in 2026 for financial year 2025.

Member states must transpose the Omnibus Proposal within 12 months of its entry into force. This means that implementation at the national level will most likely occur after the publication of 2025 financial year reports, potentially resulting in similar uncertainty due to late implementation into national law as is currently the case.

Consequences for Dutch implementation of current rules

The CSRD implementing bill was submitted to the Dutch lower house on 13 January 2025. See our 28 January 2025 article for more information.

The next step was scheduled for 18 February 2025, but a member of parliament has requested that this step be postponed until further notice pending the outcome of the Omnibus Proposal. Finance minister Heinen was asked to inform the lower house as soon as possible – preferably during the week of 3 March 2025 – about the consequences of the Omnibus Proposal on the implementation of the CSRD.

Consequences for companies

In the meantime, the first companies subject to the current CSRD rules have already published their annual reports for the 2024 financial year, including a CSRD-compliant sustainability report. They were strongly encouraged to do so by the AFM, even though the CSRD is not yet implemented in the Netherlands and is well past the original implementation deadline.

The Omnibus Proposal further increases uncertainty about what is expected of companies, mostly companies in scope of the 2024 and 2025 financial year, both now and in the future.

Proposed CSDDD amendments

Level of harmonisation

The Omnibus Proposal seeks to extend the scope of maximum harmonisation to several additional provisions of the CSDDD that regulate the core aspects of the due diligence process. Currently, the CSDDD prohibits member states from introducing national requirements that go beyond the obligations related to identifying and assessing actual and potential adverse impacts and preventing potential and ending actual adverse impacts. The proposed amendments would expand maximum harmonisation to include due diligence support at the group level and the duty to establish a complaints and notification mechanism.

At the same time, the Omnibus Proposal allows member states to introduce more stringent or more specific provisions in certain areas, including measures to address emerging risks linked to new products or services.

Direct business partner as starting point

The CSDDD requires companies to conduct due diligence on their own operations and on the operations of their subsidiaries and of their direct and indirect business partners within their chain of activities. Regarding the activities of business partners, the Omnibus Proposal narrows the due diligence requirements to apply only to direct (tier-one) business partners of the company.

The Omnibus Proposal recognises that, in certain situations, a company must look beyond its direct business partners. It stipulates that when a company has plausible information suggesting that adverse impacts have arisen or may arise at the level of an indirect business partner's operations, it must conduct an in-depth assessment.

This in-depth assessment is always required where the indirect nature of the relationship with the business partner results from an artificial arrangement that does not reflect economic reality but instead indicates an attempt to circumvent the requirement to assess the actual tier-one business partner.

The Omnibus Proposal also limits the number of information requests made as part of value chain mapping by companies in scope, unless the required information cannot be obtained through other means. Specifically, companies should generally not request information from direct business partners with fewer than 500 employees beyond what is provided for in the voluntary ESRS.

No requirement to end business relationship as last resort

The Omnibus Proposal proposes to remove the duty to terminate a business relationship as a last resort. This change is introduced because companies may heavily rely on inputs from certain business partners.

At the same time, the proposal acknowledges that if a company’s business operations are linked to severe adverse impacts, and the company has exhausted all due diligence measures to address these impacts, it must suspend the business relationship while actively working towards a solution with the business partner.

Monitoring interval extended

The Omnibus Proposal extends the interval for companies to regularly monitor the adequacy and effectiveness of their due diligence measures, from one year to five years.

Additionally, the proposal introduces a new requirement: companies must conduct ad hoc assessments whenever measures taken to address actual or potential impacts prove to be inadequate or ineffective.

Stakeholder definition narrowed and engagement limited

The Omnibus Proposal limits the notion of stakeholders by simplifying the definition and limiting it to workers, including the workers of its business partners, and the workers' representatives. And also to individuals and communities whose rights or interests are (in the case of actual adverse impacts) or could be (in the case of potential adverse impacts) directly affected by the products, services and operations of the company, its subsidiaries and its business partners. This group includes the legitimate representatives of those individuals or communities.

The proposal also restricts the stages of the due diligence process that require stakeholder engagement. First, the Commission has clarified that the company only has to engage with "relevant" stakeholders. Second, the proposal eliminates the requirement to engage with stakeholders: (i) when deciding to terminate or suspend a business relationship, as this requirement has been removed from the CSDDD, and (ii) as appropriate when developing qualitative and quantitative indicators for monitoring.

Timing: later application and earlier guidance

The parallel proposal delays the application deadline for the first group of companies from 26 July 2027 to 26 July 2028.

At the same time, the Omnibus Proposal moves the Commission's deadline for adopting general due diligence guidelines from 26 January 2027 to 26 July 2026.

Transition plan obligation amended

Article 22 of the CSDDD on the climate transition plan contains the requirement to "put into effect" such plan, going beyond the obligation to adopt the plan. The Omnibus Proposal replaces the requirement to "put into effect" the transition plan for climate change mitigation and includes a clarification that the obligation of companies to adopt a transition plan must include outlining implementing actions, planned and taken. The contents requirements for the plan remain unchanged.

The adoption of the plan, as well as its initial and updated design, will remain subject to administrative supervision.

Guidelines for fines and no minimum cap

The Commission, in collaboration with member states, is tasked with developing guidelines for fines.

Additionally, the Omnibus Proposal removes the minimum cap on fines, which was previously set at 5% of a company’s net worldwide turnover. While member states are prohibited from setting a fine cap that would prevent supervisory authorities from imposing penalties in line with the CSDDD, there is no longer a requirement for fines to be linked to worldwide turnover.

Civil liability clause

The Omnibus Proposal seeks to remove certain aspects of the EU-wide civil liability regime and delete the rule on representative actions to account for the different legal systems at the national level.

However, it maintains the requirement for effective access to justice, including the right to full compensation if a company is found liable for failing to comply with the due diligence requirements under the CSDDD, in accordance with implementing legislation.

Removal of financial sector review clause

The Omnibus Proposal removes the revision clause that would have required a report on potential future due diligence obligations for the financial sector.

The justification for this removal is that there would be insufficient time to incorporate experience and insights from the newly established general due diligence framework before assessing potential extensions to the financial sector.

Consequences for Dutch implementation of current directives

The CSDDD entered into force on 25 July 2024, requiring member states to adopt necessary laws by 26 July 2026. To this end, the Dutch government published a draft implementing bill on 18 November 2024, open for public consultation until 29 December 2024. See our article of 25 November 2024 for more details.

In January 2025, the Dutch government reported receiving over 60 responses, which are now being used to refine the bill and its explanatory memorandum. The bill is expected to be submitted to the Council of State for advisory review in spring 2025, with likely submission to the lower house of parliament in fall 2025.

Since the draft implementing bill is based on the current CSDDD rules, it must be revised to reflect changes resulting from the Omnibus Proposal. In line with current government policy, it is to be expected that the draft implementing bill will be amended such that it again complies with the objective of minimum implementation.

Consequences for companies

The delaying of the application deadline from July 2027 to July 2028 provides companies with additional time to align with the new requirements.

In addition, the gap between what is expected from companies that have declared to adhere to the OECD Guidelines for Multinational Enterprises and what will be required under the CSDDD will expand further.

Proposed Taxonomy amendments

Opt-in regime

The Omnibus Proposal introduces a new Article 19b and Article 29aa of the Accounting Directive, providing a more flexible taxonomy disclosure regime for large companies within the scope of the new CSRD and with a net turnover not exceeding EUR 450 million. These companies may make use of an opt-in regime where they claim that their activities are aligned or partially aligned with the EU Taxonomy. This means that they must include in their management report information on how and to what extent their activities are associated with those economic activities, must disclose their turnover and CapEx KPIs, and may choose to disclose their OpEx KPI.

The Commission has the authority to establish rules supplementing the reporting regime for activities that are only partially taxonomy-aligned. The Omnibus Proposal also mandates the Commission to develop delegated acts to ensure that the content and presentation of the respective reporting are standardised.

Consultation draft amendments delegated acts

In addition, the Commission opened a consultation, seeking feedback on draft amendments to the Taxonomy Article 8 Disclosure and Climate & Environmental delegated acts,. The amendments aim to (i) simplify reporting by reducing data points by nearly 70%, (ii) exempt financially immaterial activities from Taxonomy assessment; and (iii) adjust financial institution KPIs, allowing banks to exclude certain exposures from the Green Asset Ratio (GAR). Additionally, feedback is sought on two options for simplifying the "Do No Significant Harm" criteria for pollution prevention and chemical use.

Next steps

The proposals will now be submitted to the European Parliament and the Council for their consideration and adoption. In line with its communication on simplification and implementation published on 11 January 2024, the Commission invites the co-legislatures to treat these proposals with priority.