Insights
ESG Omnibus 2025: How ESG Reporting Obligations Are Changing—and Why Companies Can’t Afford to Slow Down
May 27, 2025
The European Commission has presented the ESG Omnibus Proposal, a draft amendment to current ESG regulations that significantly reshapes the planned implementation of the Corporate Sustainability Reporting Directive (CSRD). The main goals? To reduce administrative burdens and shift the focus to more effective data collection.
ESG Obligations in 2025
Non-financial reporting will now apply only to large companies with over 1,000 employees and a turnover exceeding CZK 1.3 billion. This means the number of Czech companies subject to the regulation will drop by roughly 80% compared to initial estimates.
Small and medium-sized enterprises (SMEs) still benefit from a deferral—whether they will be included in mandatory reporting will be decided later. Moreover, the proposal limits the data that large companies can request from SMEs to the scope defined by the voluntary VSME standard.
When Do the New ESG Reporting Deadlines Apply?
The deadlines for mandatory ESG reporting are being pushed back. For most companies, obligations will begin in 2026 or 2027, with additional requirements—such as tracking progress towards carbon neutrality—coming into effect in 2028. The EU’s long-term goal of climate neutrality by 2050 remains unchanged.
How Is Supply Chain Responsibility Changing?
Under the Corporate Sustainability Due Diligence Directive (CSDDD), responsibility for supply chains will now apply only to direct suppliers, and evaluations will be required once every five years (instead of annually). Legal liability will be governed by national legislation, not EU law.
What’s Changing in the EU Taxonomy and Audits?
Additional updates concern the EU Taxonomy: the threshold for what qualifies as “financially material” is being raised, and reporting templates will be simplified. The obligations apply only to companies with more than 1,000 employees and turnover above EUR 450 million.
Audit requirements will shift from limited assurance to reasonable assurance, a more rigorous level of verification. This raises expectations for data quality and internal preparedness.
What’s Missing from the Proposal?
The draft eliminates sector-specific standards, making them voluntary. While this could ease the transition for companies, it also raises concerns about the comparability of reported data across industries.
Summary: What Does This Mean for Czech Companies?
Relief: Companies previously expected to fall under CSRD may be exempt, as the new criteria are stricter.
Later—but more thoroughly: The delay gives companies more time to prepare, but the expectations (especially around audits) remain high.
Focus on direct suppliers: Narrower scope of responsibility, but companies must still have systems in place to manage ESG risks.
Strategic opportunity: ESG reporting is more than bureaucracy—well-prepared ESG data can be a tool for risk management, securing financing, and enhancing brand reputation.
What Are the Benefits of ESG Reporting Even Without a Legal Obligation?
The proposed changes give companies time to prepare without pressure—but also signal a stronger focus on data quality, accountability, and verifiability.
ESG reporting is no longer just a compliance issue. Companies that start collecting relevant ESG data early gain a strategic edge:
- Better risk management
- Greater appeal to investors and easier access to financing
- Stronger trust among customers and business partners
“CSRD can serve as a roadmap that prepares your business for the future—and strengthens your position as a sustainability leader, beyond just ticking regulatory boxes.”
– Gabriela Mokošáková, Global Sustainability Lead
Recommendations: How to Start Preparing for ESG Now
- Use this time to prepare internal processes, start data collection, and run a pilot report.
- Map ESG risks across your direct and indirect suppliers.
- Prepare for the shift to reasonable assurance audits—it will require stronger control mechanisms.
- Start integrating ESG into your corporate strategy and governance.
