Summer 2025 FAQ: The EU’s ESG Omnibus – What Just Happened, and Why It Matters

Question #1: I need a refresh. What exactly is the EU “Omnibus” package?

We like to think of it as the EU’s ESG recalibration. In early 2025, the Commission rolled out a two-part Omnibus package (I & II) to simplify key sustainability laws—CSRD, CSDDD, CBAM, and the EU Taxonomy. The goal is to refocus ESG demands where they actually move the emissions needle and eliminate both barriers to compliance and focus on quality over quantity in transparency.  

Question #2: Who’s in scope, and who gets a break?

The net shrinks. The CSRD will now only apply to large companies—1,000+ employees and €50M turnover (or €25M assets). That’s a massive shift: ~80% of previously in-scope firms are now out. SMEs are also officially off the hook—unless they opt in. For the CSDDD (supply chain due diligence), thresholds rise and timelines shift: it now kicks in 2028, not 2027. 

Question #3: What is actually being simplified?

CSRD (Sustainability Reporting Directive)

• Higher thresholds meaning fewer companies reporting.
• Voluntary opt-in for SMEs. 
• Trade secret protections expanded. 
• Assurance requirements (light audits) delayed to 2028. 

CBAM (Carbon Border Adjustment Mechanism)

• Introduces a 50-tonne annual exemption for importers. 
• This results in 90% of CBAM-eligible importers now exempt. 
• Focus stays on those importing high volumes of embedded carbon (think steel, aluminum, cement). 

CSDDD (Due Diligence Directive)

• Applies only to direct suppliers. 
• No more automatic obligation to terminate suppliers with ESG risks—companies can weigh business continuity. 
• Compliance delayed to 2028, giving firms time to prep realistic, risk-based due diligence programs. 

ESRS (European Sustainability Reporting Standards)

• Reporting requirements streamlined—fewer KPIs. 
• Sector-specific disclosures delayed. 
• Non-material topics can now be dropped. 

Question #4: What does this mean for global emissions reductions globally?

Let’s be honest: ESG was drowning in detail. The Omnibus changes that. While we share frustration around deregulation, we can think of it as largely reallocation. 

Positives:

• Compliance efforts are now targeted at high-impact emitters. 
• Less bureaucracy = more budget for real decarbonization projects. 
• Encourages multinationals to adopt modular ESG frameworks—flexible across regions. 

Risks:

• SMEs may scale back climate efforts. 
• Reduced mandatory disclosures mean less value chain transparency, especially in high-risk geographies. 

The largest companies, who account for the majority of Scope 3 emissions, remain squarely in scope. For everyone else, the EU is offering breathing room—while still nudging them to align voluntarily. 

Question #5: What’s next in the EU?

We will continue to watch for ongoing developments in the coming months: 

Question #6: What about the U.S.? Is regulation here alive?  

ESG continues to be a partisan topic:

• The “Protect USA Act”, proposed in March, aims to block foreign ESG rules (like EU’s CSDDD) from impacting U.S. contractors (Source). 
• The “Ensuring Sound Guidance Act” would force pension funds to prioritize returns over ESG factors (Source). 
• Some SEC climate disclosure rules are being pulled back by Trump-era appointees. 
• But not everything’s reversed: in February 2025, a Texas court upheld the Biden-era rule allowing ESG consideration in retirement plans (Source). 

Companies operating in the U.S. and EU will need to balance divergent ESG strategies—agile, localized, and legally durable. 

Question #7: Is California’s regulation matching the EU’s sophistication?

California continues to lead from in ESG for U.S. state policy. In July 2025, the California Air Resources Board (CARB) issued updated guidance to implement its landmark Climate Corporate Data Accountability Act (SB 253) and Climate-Related Financial Risk Act (SB 261)—laws that will materially reshape climate disclosure obligations for large companies operating in the state. 

California’s rules echo parts of the EU CSRD. Companies will need to reconcile CARB’s timelines with SEC, EU, and other frameworks to avoid duplicated effort. 

Read more about California regulations in Veerless’ updated version of “The Sheet” detailing California’s laws here. 

Question #8: OK, I think I get it. But what about reporting? When do I really need to be CSRD compliant?

The answer depends on whether you’re still in scope after the Omnibus recalibration. 

If you’re a large company (1,000+ employees and €50M turnover or €25M in assets), you’re still on the hook. Here’s the updated timing:

• Large public-interest entities and issuers on an EU-regulated market with more than 500 employees (also known as “Wave 1”, companies that were already subject to NFRD in the EU): Your timeline stays intact. That means reporting for fiscal year 2024, published in 2025. Many of these reports are already available. 
• First-time EU reporters (large public entities in the EU who were not subject to NFRD previously, known as “Wave 2” under the revised CSRD scope): Your reporting obligation kicks in for fiscal year 2027, with disclosures published in 2028. Note: This may include U.S. parent companies with significant subsidiaries in the EU. 
• SMEs: You’re officially out, unless you voluntarily opt in with VSME (Voluntary Sustainability Reporting Standards).
• Other large, non-EU entities doing business in the EU but not subject to Wave 1 or 2, reporting for fiscal year 2028 by 2029.   

Question #9: What is Veerless’ best advice on regulatory readiness for companies?

Signal readiness, not compulsion. In the EU, revisit your CSR roadmap: validate whether new thresholds move you out of scope, update emissions assumptions (CBAM), and lay the groundwork for evolving due diligence structures. Watch the fall Parliament vote closely—it could shift the game again. 

In the U.S., stay informed. Federal ESG policy is volatile, so have adaptable governance structures. Monitor both statutory moves (Protect USA, pension rules) and court actions. Build resilience now—anticipate bifurcated compliance across jurisdictions. The U.S. federal scene may be fractured, but California is crystal clear—climate data is now table stakes. If you’re a multinational, your ESG strategy needs a West Coast clause. 

Above all, separate signal from noise. Focus on climate resilience, risk disclosure, and stakeholder alignment—regardless of the rhetoric. 

To conclude – The ESG world is splitting—Europe is optimizing, the U.S. is polarizing. 

But for multinationals, one thing holds true: you need systems that scale, flex, and adapt. That means focusing less on box-checking, and more on real ESG strategy—what you measure, how you act, and who you’re accountable to.