The CSRD no longer applies to most companies. Since 18 March 2026, the threshold has risen to 1,000 employees and EUR 450 million in revenue. If your company falls below that, take a breath. But do not relax too much.
What just happened
On 26 February 2026, the EU published Directive (EU) 2026/470, commonly known as the Omnibus I Directive. It entered into force on 18 March. In short: sustainability reporting gets simpler. Fewer companies are required to report. Fewer datapoints. Less regulatory pressure on smaller firms.
The goal was to reduce the administrative burden, especially for SMEs, without abandoning the Green Deal objectives. After a year of negotiations between the Commission, Council and Parliament, the result is clear: the scope of the CSRD has been drastically reduced.
The new thresholds: who is in and who is out
Before the Omnibus, the CSRD was to be phased in:
- Wave 1 (already reporting since 2024): large public-interest entities, over 500 employees.
- Wave 2 (planned 2025-2026): large companies meeting at least 2 of 3 criteria (250 employees, EUR 50 million in revenue, EUR 25 million in balance sheet total).
- Wave 3 (planned 2026): listed SMEs.
- Wave 4 (planned 2028): subsidiaries and branches of non-EU companies.
Now, with the Omnibus:
- New EU threshold: applies only if you have more than 1,000 employees AND more than EUR 450 million in net revenue.
- Wave 3 disappears entirely: listed SMEs no longer have to report.
- Non-EU companies: applies only if you generate more than EUR 450 million in EU revenue and have a subsidiary or branch with more than EUR 200 million.
- Member States may exempt Wave 1 companies that no longer meet the new thresholds for fiscal years 2025 and 2026.
This means thousands of companies that were preparing are no longer required to report. But note: “not required” is not the same as “not affected”.
The cascade effect does not disappear, it changes shape
Here is what many analyses do not tell you: even if your company no longer has to report under the CSRD, your large clients probably do. And to produce their sustainability report, they need data from their value chain. From you.
The Omnibus introduces the concept of “shielded undertaking”: if you have fewer than 1,000 employees, you can refuse information requests that go beyond what the voluntary standards (VSME) establish. The Commission has until July 2026 to adopt those standards.
But think about it this way: being able to say “no” to an excessive data request does not mean it is a good idea. If your client is a large corporation asking for your carbon footprint, are you really going to refuse?
Regulation goes down. Market expectations go up. Large companies that do report will ask their suppliers for data. And whoever has that data ready wins.
The ESRS are also being simplified
The European Sustainability Reporting Standards are under revision. EFRAG published a draft in December 2025 that cuts mandatory datapoints from roughly 1,073 to approximately 320, a 70% reduction. The Commission must adopt the final version before September 2026.
What does this mean? Less narrative, more essential quantitative data. Companies still in scope will report fewer things, but more focused. Those leaving scope can use the voluntary standards (VSME) as their reference.
For a detailed breakdown of what changes in the ESRS, read our dedicated analysis: Simplified ESRS 2026: fewer datapoints, sharper focus.
The CSDDD is also being cut back
The Corporate Sustainability Due Diligence Directive (CSDDD or CS3D) raises its thresholds to 5,000 employees and EUR 1.5 billion in revenue. The obligation to have a climate transition plan is removed. Civil liability is softened. Penalties are capped at 3% of global revenue.
For mid-sized companies, this is real relief. But again: not being legally required does not mean your investors, clients or banks will not ask.
What your company should do now
If you remain in scope (more than 1,000 employees, more than EUR 450 million): Keep preparing. The new simplified ESRS will make your life easier, but reporting is still mandatory. Prepare for double materiality: the Omnibus keeps it. Check our CSRD reporting guide for the full picture.
If you leave scope: Do not abandon sustainability. Your large clients will ask for data regardless. Calculate your carbon footprint: it is the most requested data point, and having it ready gives you a competitive edge. Explore voluntary reporting with the VSME standard when it is published (expected July 2026).
If you supply a large company: Understand the “value-chain cap”: you can refuse excessive requests, but cooperating positions you better. Calculate your Scope 1, 2 and 3 with a solution that makes it easy. Do not wait for your client to pressure you with an endless spreadsheet.
The angle that matters
Regulation has lowered the bar, but the market is raising it. Reporting your carbon footprint is no longer just about complying with a law; it is about proving to your clients that you are a reliable supplier.
dcycle helps you calculate your footprint automatically, without expensive consultants and without endless spreadsheets. If you are in scope, you comply. If you are not, you arrive prepared when your client asks. Explore all the sustainability frameworks we support.
Request a demo and discover how dcycle can help you.