The EU has proposed changes to sustainability regulations through the so-called Omnibus proposal. In short, the proposal introduces simplifications that delay and reduce reporting requirements for some companies. However, it's important to note that it does not remove the need for ESG reporting.
Investors, customers, and regulators will continue to demand documentation on sustainability efforts, and companies that start preparing now will have a much smoother transition than those that wait.
What is the Omnibus proposal?
The European Commission has proposed changes to the CSRD (Corporate Sustainability Reporting Directive), CSDDD (Corporate Sustainability Due Diligence Directive), and the EU Taxonomy to ease the reporting burden for businesses.
Before it is adopted, the proposal must be approved by the European Parliament and the Council of the European Union. In Norway, these changes will take effect through the EEA Agreement. We estimate that the process will take 6–12 months.
Key points of the proposal
- Postponement of reporting obligations for Waves 2 and 3:
Companies that were due to report from 2025 or 2026 will have two additional years.
- Simplifications in reporting standards:
Fewer data points required under ESRS (European Sustainability Reporting Standards).
Proposal to remove sector-specific standards and prioritise a voluntary standard for SMEs (VSME).
- Fewer data requirements from supply chains:
Companies with fewer than 1,000 employees will not be required to provide supply chain data beyond what is covered by the VSME voluntary standard.
“The proposal may give the impression that ESG reporting is becoming less important. In reality, the requirements still apply to many companies, and stakeholders will continue to demand transparency on sustainability.”
– Hilde Gamkinn, ESG Manager, Metizoft AS
What you should keep in mind
Carbon accounting remains best practice. Understanding and documenting your company’s climate impact provides a strong foundation for sustainability efforts and meets investor and customer expectations. Additionally, CO₂ reporting, energy efficiency measures, and climate risk assessments are still required for certain maritime companies under EU ETS, IMO, Poseidon Principles, and other frameworks.
The Norwegian Transparency Act still applies. Due diligence assessments should still be conducted in line with OECD guidelines and UN Guiding Principles.
Double materiality analysis, climate risk analysis, and nature risk analysis provide valuable insight to prepare for transformation and robust operations. Environmental risks are among the biggest challenges businesses will face in the next decade. Thorough risk assessments help companies future-proof their operations and strategy.
“We see that the EU’s sustainability reforms are shifting focus towards decarbonisation and resilience. These terms are also increasingly used in capital markets, replacing ‘sustainability’ and ‘ESG’.”
– Hilde Gamkinn, ESG Manager, Metizoft AS
Q&A: Should we start ESG reporting now?
1. Is ESG reporting still relevant after the Omnibus Proposal?
Yes. While the EU is proposing to delay or simplify some requirements, ESG remains a key
factor for investors, customers, and regulators. Double materiality analysis and carbon accounting are essential tools for setting a clear direction, and sustainability efforts are becoming more critical for competitiveness and reputation.
2. Do we need to report for 2024, or can we wait?
If your company is in Wave 1, you must report for 2024.
If your company falls into Wave 2 (2025) or Wave 3 (2026), the EU is proposing a two-year delay.
After the transition period ("stopwatch"), the sustainability reporting requirements will only apply to large companies and parent companies of large groups. This includes businesses with more than 1,000 employees in the company or group, as well as those meeting the criteria for turnover or balance sheet total.
The proposal removes the reporting obligation for listed companies, meaning they will only be covered if they meet the requirements for the number of employees, turnover, or balance sheet total.
We still recommend preparing now, to avoid bottlenecks later.
3. What happens if we wait?
Delaying ESG reporting could create several challenges:
- Time and resource constraints when requirements come into effect, or when customers demand sustainability data.
- Low-quality ESG data and poor insight into future business risks.
- Reduced competitiveness in tenders and customer relationships due to missing or low-quality data.
Companies that start now will benefit from a smoother and more cost-efficient transition, gaining early insights into risks that could impact their business in the future.
4. What should we prioritise in ESG reporting?
The focus should be on streamlining data collection and automating ESG and decarbonisation reporting. This improves reporting quality and reduces manual workload in the long term.
We recommend:
- Carbon accounting – make your company’s climate impact visible.
- Double materiality analysis – understand your company’s impact and risks.
- Climate and nature risk assessments – gain valuable insights for transition and business resilience.
- Integrate ESG into your strategy – ESG is not a separate project; it should be part of your core business strategy.
5. What’s the difference between voluntary and mandatory reporting?
Voluntary reporting (for companies outside Waves 1–3) provides a strong market advantage and helps businesses stay ahead of future regulatory requirements.
Mandatory reporting applies to large companies and will impact entire value chains, including smaller suppliers.
6. How can we make ESG reporting easier?
- Automate data collection – avoid manual processes.
- Use relevant standards (ESRS or VSME) – ensure comparability and efficiency.
- Choose the right tools – Metizoft helps businesses transition smoothly to ESG reporting.
Need guidance on what your business should do next? Get in touch with us.