What EU Omnibus I changes for emerging-market suppliers under CSRD and CSDDD

Directive (EU) 2026/470, dated 24 February and published in the Official Journal on 26 February, limits mandatory EU sustainability reporting to undertakings that exceed a net turnover of EUR 450 million and an average of 1,000 employees, according to its text. On 3 July the European Commission adopted revised European Sustainability Reporting Standards (ESRS) and a voluntary standard for smaller companies outside the Corporate Sustainability Reporting Directive (CSRD), its announcement says. For suppliers and subsidiaries in emerging markets, the practical questions are whether a customer still has to report, what it may ask for, and which tests reach a non-EU group.

Who is in scope

The same size test applies to individual undertakings and, on a consolidated basis, to groups, under Articles 2(1)(a), 2(4)(a) and 2(5)(a) of the Directive. Third-country groups are reached through Article 40a. It applies where a group generated net turnover in the Union above EUR 450 million in each of the last two consecutive financial years, and then to an EU subsidiary or branch whose net turnover in the preceding financial year exceeded EUR 200 million, the text says. Recital 26 says the group-level figure rises from EUR 150 million. A group whose sales are mostly outside the Union therefore stays outside the article unless its EU turnover passes the threshold.

The same Directive amends Directive (EU) 2024/1760 on corporate sustainability due diligence (CSDDD). Article 2(1)(a) now covers companies with more than 5,000 employees on average and net worldwide turnover above EUR 1.5 billion, and Article 2(2)(a) covers non-EU companies with turnover in the Union above EUR 1.5 billion, according to the text. The franchising and licensing tests are royalties above EUR 75 million with group turnover above EUR 275 million. Recital 46 postpones application of the CSDDD to all companies to 26 July 2029, and recital 47 says the climate transition plan provisions are to be repealed. Recital 48 says Member States should set a uniform maximum limit on pecuniary penalties of 3 per cent of net worldwide turnover, and recital 49 says the Union-wide civil liability regime should be removed.

What customers can ask of suppliers

The Directive adds a value-chain cap. A protected undertaking is one in a reporting undertaking's value chain that does not exceed an average of 1,000 employees in the preceding financial year, under Article 2(4)(b). Reporting undertakings "shall not require protected undertakings to provide information exceeding the information specified in the voluntary standards", the text says. A contract term to the contrary is not binding, though the rest of the contract remains valid.

A customer may rely on a supplier's self-declaration of size without verifying it, but not where it knows, or can reasonably be expected to know, that the declaration is wrong. If a request goes beyond the voluntary standard, the customer must say which information exceeds it and tell the supplier of its "statutory right to decline to provide the information". The cap does not cover requests made for other purposes such as due diligence, and it creates no duty for value-chain undertakings to provide sustainability information, according to recital 12 and Article 2(4)(b). Because of that carve-out, the CSDDD dates above matter to suppliers separately from the CSRD cap.

The Commission adopted the voluntary standard as a delegated act on 3 July as a single, proportionate reference framework for smaller companies, with the cap built in, its announcement says. Recital 22 says it should be based on Recommendation (EU) 2025/1710, and recital 23 requires a review at least every four years. The revised ESRS cut mandatory datapoints by more than 60 per cent and total datapoints by more than 70 per cent, and the Commission expects reporting costs to fall by more than 30 per cent per company, the announcement adds.

Assurance and what to watch

Article 1(3) of the Directive requires the Commission to adopt limited-assurance standards by delegated act no later than 1 July 2027. Recital 4 explains the postponement from 1 October 2026, and recital 5 removes the requirement for reasonable-assurance standards. For auditors outside the Union, new Article 45(5b) of Directive 2006/43/EC covers assurance reports issued for financial years starting between 1 January 2025 and 31 December 2030. A third-country auditor or audit entity must supply information including its legal structure, its assurance standards and the outcome of its last quality assurance review, and the authority "shall not register" it if that information is missing, the text says.

• Publication of the revised ESRS and the voluntary standard in the Official Journal. The Commission's delegated acts page, last updated on 3 July, lists both as not in force until published and does not report the outcome of scrutiny, which the announcement says runs for two months and can be extended by two.
• The limited-assurance delegated act, due no later than 1 July 2027 under Article 1(3).
• Application of the CSDDD to all companies on 26 July 2029, per recital 46.