The EU has now finalised the Omnibus I political agreement on sustainability reporting and due diligence. This package revises the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). The stated goal is to simplify the rules and reduce the burden on companies.
According to the European Parliament press release of 8 December 2025, the scope of both directives has been significantly narrowed. Under the revised CSRD, only companies with more than 1,000 employees and net turnover above €450 million are required to report. The same €450 million threshold applies to non-EU companies operating in the EU. Due diligence obligations under the CSDDD are limited even further, applying only to large corporations with more than 5,000 employees and €1.5 billion in turnover.
The agreement also simplifies how companies report. The focus shifts away from long narrative disclosures toward core quantitative information. Under CSRD, reporting is built around the European Sustainability Reporting Standards (ESRS). These come in three layers:
- Cross-cutting standards
These apply to everyone in scope. They cover general disclosures, strategy, governance, and basic metrics. - Topical standards
These cover themes like climate, pollution, water, circular economy (E5), workforce, etc. Companies report on them if they are material (significant enough to affect the company’s business, decisions, or performance) to their business. - Sector-specific standards
These is meant to add extra, detailed requirements for specific industries, like shipping, construction, energy, or manufacturing.
Originally, the plan was that sector-specific ESRS would become mandatory once they were developed. That would have meant extra metrics and disclosures on top of the general and topical standards, tailored to each sector.
However, sector-specific reporting becomes voluntary, and companies can use a central digital portal with templates and guidance. Some earlier requirements, such as mandatory climate transition plans under the CSDDD, have been removed. Enforcement and penalties remain at national level, with fines capped at 3 percent of global turnover.
The glass half full — despite the rollback
At first glance, the Omnibus deal is not reassuring. It reduces the number of companies required to report and removes obligations that were meant to drive accountability and long-term change. For many observers, this is a clear step back from the ambition that originally sat behind the CSRD and CSDDD.
Acknowledging that, the question is not whether deregulation is good. It isn’t. The question is what still holds, and what becomes even more important in a weaker regulatory environment.
On circular economy reporting, one reality remains unchanged. The largest companies still drive most material extraction, material flows, waste generation and product volumes. Even under the narrowed scope, reporting by these actors still captures where the majority of environmental pressure sits. That does not excuse the loss of coverage across the wider economy, but it does mean that material data from those still in scope remains highly relevant.
At the same time, the refocusing of the European Sustainability Reporting Standards, especially ESRS E5 on circular economy, places more weight on measurable performance. Less narrative, fewer generic statements, and more emphasis on concrete data such as material inputs, outputs, waste streams and key resources. This is not a win of deregulation, but a reminder that data quality matters more than volume, particularly when political ambition weakens.
In other words, the scope has shrunk, and that is a loss. But the basic logic of meaningful reporting — tracking real material flows and impacts — has not disappeared. If anything, it becomes more important when fewer companies are forced to report.
For the yachting sector, this distinction matters. Many companies will now fall outside the formal CSRD thresholds. That should not be interpreted as permission to pause or disengage. In a sector that is highly material-intensive and dependent on complex supply chains, the absence of regulatory pressure increases the risk of blind spots rather than reducing it.
Voluntary reporting therefore becomes more, not less, important. It remains one of the few ways to understand material use and waste, demonstrate credible circular economy performance, and stay aligned with owners, financiers and insurers who increasingly expect quantified, decision-useful data. Where regulation steps back, market expectations and industry responsibility must step forward.
Read our article on what this means for the yachting sector and how to move forward.