EU climate reporting: simplification is not simple

The European Commission has announced plans to simplify climate reporting and reduce the burden placed on businesses by legislation that includes the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). The Commission’s Omnibus I proposals — COM(2025) 80 and COM(2025) 81 (February 2025) — aim to delay all CSRD and CSDDD reporting until 2028, remove a large number of smaller (mid-cap) businesses from their scope, and simplify required data points. While these changes reduce reporting requirements, they also introduce fast and complex revisions to existing rules. Data center operators should monitor the progress of the Omnibus closely.

KEY POINTS

• Climate risk reporting under CSRD and CSDDD, phasing in from 2025, has been criticized as burdensome and harmful to European competitiveness.
• The proposed EU Omnibus package of simplification contains a fast-tracked “stop-the-clock” proposal to delay all reporting until 2028, except for the first wave due in 2025 (FY2024) under CSRD.
• A second part of the proposal intends to alter thresholds, removing European operators with fewer than 1,000 employees from the scope of CSRD reporting and simplifying data points under the rules of the European Sustainability Reporting Standards (ESRS) and the EU Taxonomy.
• The speedily-composed proposals include an anomaly: the CSRD’s 250-employee threshold is retained for organizations owned outside the EU. This and other aspects of the Omnibus may change during consultations.