A brief overview of CSRD

The Corporate Sustainability Reporting Directive (CSRD) is the EU’s regulatory framework for sustainability reporting, introduced in early 2023. It requires large companies to report in detail on their sustainability work according to standardized EU guidelines (ESRS).

The main objectives of the CSRD are to:

• Increase transparency around companies’ environmental and social impact

• Create a uniform reporting standard across the EU

• Make it easier for investors to compare sustainability performance

• Accelerate the transition toward a more sustainable business sector

The reporting covers areas such as climate impact, resource use, human rights, labor conditions, and business ethics—making it significantly more extensive than previous requirements.
Read more about CSRD and the ESRS standards here.

It’s also worth exploring PWC’s analysis of the first wave of CSRD reports (for reporting year 2024), which summarizes key insights and lessons—these will undoubtedly influence the road ahead under Omnibus. Grant Thornton also provides guidance and tips, including the importance of tailoring your path to your organization’s needs—read more here.

What is the Omnibus Proposal and how could it change CSRD?

Recently, the European Commission presented a proposed “Omnibus Directive” that could change the landscape—especially for small and medium-sized enterprises (SMEs). The aim of the Omnibus proposal is to simplify the rules and reduce administrative burden. However, it has also created uncertainty about what will actually be required moving forward.

In this article, we want to CLARIFY two key points:

• What we know and what is already decided

• What remains uncertain

We also want to provide guidance on the risks of making hasty decisions, how to involve industry associations and experts, what an informed decision actually means in this context, and offer recommendations for how companies can act despite the uncertainty.

Now is not the time to be reactive—this is a moment for proactive action, and there’s a lot to gain by doing so.

Current status – What we know today

CSRD at a glance:

The CSRD came into force in early 2023 and requires companies within its scope to publish annual sustainability reports based on the EU’s common standards (ESRS). The goal is to improve transparency about corporate environmental and social impact and to harmonize reporting across the EU. This still holds true, but the timeline, scope, and content of the legislation are now under review.

Let’s take a closer look at the Omnibus changes and what they actually mean. We’ve divided them into confirmed and proposed changes:

What has been decided?

So far, only the “Stop the Clock” proposal has been officially approved. You can read the final legal text here. This means a revised timeline:

• The first wave continues as planned with reporting in 2024

• The second wave is postponed to 2027 (previously 2025)

• The third wave is postponed to 2028 (previously 2026)
  EU member states have until December 31, 2025 to incorporate the directive into national legislation.

What is still under negotiation?

Several important proposals are still being debated:

• Raising the employee threshold from 250 to 1,000

• Simplifying the ESRS reporting standards

• Less extensive value chain reporting via a new VSME standard

• Limited assurance requirements for audits

What does this mean in practice?

It’s highly likely that “Stop the Clock” will be implemented into Swedish law during 2025, given the EU’s swift action and the directive’s current status at EU level.
However, the exact implementation date is still unclear!
The remaining changes—like raised thresholds and simplified standards—are still under negotiation.
Meanwhile, market expectations for sustainability reporting remain, regardless of legal requirements.

So, how should companies act in this situation?

That’s a question we hear often. Our clear recommendation is to apply the precautionary principle and future-proof your organization—but there are several ways to go about it.

HOW DID WE GET HERE?

To understand Omnibus and the current uncertainties, let’s take a step back and look at the broader context.

It started in 2021 when the EU introduced its ambitious sustainability reporting plans—CSRD.
The intention was good: companies would become better at communicating their sustainability efforts. But, as with many major changes, it turned out to be more complex than expected.

During 2022 and 2023, things gained momentum. Companies began preparing, new standards (ESRS) were developed, and optimism was high.
It hasn’t been a smooth journey. The new requirements have been extensive, and companies have had to invest in new systems, skills, and ways of working.

Now, the Omnibus package comes as a response to these challenges. As of spring 2025, we’re seeing:

• Large companies continue as planned

• Medium-sized companies get two extra years

• It's unclear which companies will be affected, as thresholds might change, but no decisions have been made yet

• The requirements will be rolled out gradually

SustainLab recommends companies make informed decisions based on facts and expertise. Take a proactive stance, consult stakeholders and trusted advisors, and gather insights from reliable sources.

What’s a good decision going forward? What are the Risks and Opportunities?

Many companies may be tempted to take the Omnibus updates as a reason to cancel their CSRD projects. But this is risky.
Nothing beyond the timeline is formally decided yet, and many of the requirements may return.
An isolated decision without expert guidance or regulatory clarity could backfire—leading to a rushed restart later.

Differing strategies across companies in the same sector can also cause fragmented industry practices.
Some continue reporting as planned; others hit pause. If it turns out that reporting is still needed, those who paused may need to do double the work—first changing direction, then catching up. This is inefficient and costly.

Sustainability data only becomes meaningful when there’s industry-wide consistency. A company that stops reporting key metrics while competitors continue risks losing comparability—which could turn investors away.

Even if the law allows for reduced reporting, choosing not to report can damage trust and capital access.
In today’s high-profile sustainability landscape, a company that openly opts out of reporting may face strong criticism. Stakeholders may see it as a lack of transparency and engagement.

Meanwhile, industry peers that continue their sustainability efforts despite relaxed laws may gain respect.
A decision made without broader grounding risks damaging your reputation and relationships.
Read the insights from Tidningen Balans and Mikael Scheja on why not to waste the investments you’ve already made—here!

Decision paths – There is help!

Given the uncertainty and risks, how can companies make smart decisions?
A key principle: don’t decide in a vacuum.

Here are some guiding tips for internal discussions:

• Use your industry associations! Take advantage of the organizations you’re a member of. Many industry groups are actively working on CSRD. Join in to share insights, ask questions, and see how others are thinking. These organizations often have ongoing dialogues with regulators and can provide clarifications.
  Supporting your industry association in developing voluntary standards or shared guidelines can be valuable—legitimacy increases when everyone does the same. Example: MRF.

• When it comes to sustainability reporting, think in terms of three pillars: platform (systems/tools), processes (ways of working), and people (skills/roles). An experienced advisor can help assess these and ensure you have a solid foundation for decisions.

• Following researchers and expert networks can also be valuable—but be cautious of the many interpretations circulating. Focus on verified facts rather than speculation.

Every company has its own context. While collaboration is key, each organization must tailor its strategy to its unique needs.

How to make a smart, informed sustainability reporting decision?

In these uncertain times, making well-founded decisions is critical.
A good decision is based on up-to-date knowledge of the rules and external landscape, paired with an understanding of your own needs and stakeholders.

To make an informed decision, you should:

• Gather facts from reliable sources about current rules and requirements

• Analyze different courses of action and their consequences—what happens if you pause vs. continue?

• Consult both internal experts and external stakeholders for diverse perspectives

• Document the decision-making process and reasoning for future follow-up

• Stay flexible—be prepared to adjust your decision as circumstances evolve

Recommendations – Moving forward despite uncertainty

How can Swedish companies act in this situation? Here are some practical tips:

• Stay informed by following CSRD and Omnibus developments through official sources. Appoint someone responsible for monitoring regulatory updates so you can react quickly.

• Continue basic sustainability efforts at a steady pace. Collect key data like emissions and energy use, but scale down larger external projects. Many companies already see the value of this work—regardless of legal pressure.

• Collaborate with your industry on common guidelines and reporting. This enhances efficiency and influence. A short annual sustainability update could be a useful minimum standard to agree on.

• Use the time for dialogue—both upward with policymakers and downward through your supply chain. Larger companies should define fair supplier expectations; smaller companies can proactively ask customers what they need.

• Develop internal systems and processes gradually. Implement data collection tools and train staff. This gives you control and readiness when reporting requirements come into force.

• Review existing sustainability commitments, such as those in loan terms or procurement agreements. Coordinate various reporting obligations to work efficiently.

• Be transparent with stakeholders about your choices. If you pause full reporting, explain why and what you're doing instead. Transparency builds trust.

• Keep your eyes on the long-term goal—sustainability is more than reporting. Keep making real improvements in environmental and social areas. When reporting eventually becomes mandatory, you’ll have meaningful progress to show.

By following these recommendations, you can approach the uncertainty constructively.
The sustainability issue isn’t going away—it’s just changing shape. A smart approach now means you’ll be ready, no matter how the rules evolve.

Watch out on-demand webinar

Click here to hear Stefan and Maria break this down further and share practical insights.