The EU Omnibus Package and its Implications for Swiss Companies

1 Competitiveness and Sustainable Growth

In line with the European Commission's competitiveness compass and the recommendations of the Draghi Report, the European Commission is seeking to simplify the EU's sustainability regulatory framework. On 26 February 2025, it published the 'Omnibus'  package, proposing significant changes to key directives, particularly the Corporate Sustainability Reporting Directive ("CSRD") and the Corporate Sustainability Due Diligence Directive ("CSDDD"). Against the backdrop of recent geopolitical shifts and economic pressures, the European Commission aims to balance key priorities: maintaining the objectives of the Green Deal while enhancing EU competitiveness and alleviating administrative burdens on EU companies.

Notably, the package includes:

• a proposal to adjust the application timelines for the CSRD and CSDDD (commonly referred to as the "stop-the-clock" proposal); and
• a proposal aiming at easing compliance and reporting obligations, with a particular focus on small and medium-sized enterprises (SMEs).

The package also proposes amendments to the Taxonomy Regulation and Carbon Border Adjustment Mechanism. This insight focuses specifically on the proposed changes to the CSRD and CSDDD.

2 Key Proposed Amendments

2.1 Corporate Sustainability Reporting Directive (CSRD)

The omnibus package proposes several changes to the CSRD, most notably:

Reduction in scope of EU and non-EU companies: To align with the CSDDD, the EU Commission proposes raising the employee threshold for CSRD applicability to EU companies from 250 to 1'000 employees, while maintaining the existing financial thresholds of either a EUR 50 million turnover or EUR 25 million balance sheet total. Additionally, listed SMEs, which were previously in-scope, would now be entirely excluded. This change would reduce the number of companies required to report under the CSRD by 80%.

The Omnibus package also modifies the scope for non-EU parent companies: a non-EU parent will be captured if it has

•  a net EU turnover in excess of EUR 450 million (increased from EUR 150 million under the current rules) and
• an EU subsidiary subject to CSRD or an EU branch with turnover exceeding EUR 50 million (raised from EUR 40 million currently).   

Postponement of reporting requirements: Companies currently due to report in 2026 for the financial year 2025 (so-called "wave 2" companies) and small credit institutions and captive insurance and reinsurance undertakings currently due to start in 2027 for 2026 (wave 3), would see their reporting requirements postponed by two years. The Omnibus package, however, does not contemplate changes to the timeline for in-scope non-EU parent companies. 

Value-chain cap: For companies no longer in-scope, such as SMEs, the Commission proposes a voluntary reporting standard based on the voluntary standard for SMEs (VSME) developed by EFRAG. In turn, in-scope companies would be legally restricted from requesting more sustainability information from out-of-scope entities in their value chain than what is required under the VSME (so-called "value-chain cap"), except for sustainability data that is commonly shared within their sector.

Revision of the European Sustainability Reporting standards (ESRS): The EU Commission intends to simplify the ESRS by significantly reducing the number of required data points, clarifying outstanding issues and moving away from sector-specific standards. Despite speculation ahead of the package’s publication, the principle of double materiality, however, remains unchanged.

2.2 Corporate Sustainability Due Diligence Directive (CSDDD)

The omnibus proposal further provides for amendments to the CSDDD, which is currently being transposed into national law by EU Member States. Key proposed amendments include:

Postponement of transposition and compliance deadlines: The European Commission proposes to postpone the transposition deadline for the EU Member States by one year, from 26 July 2026 to 26 July 2027. As a result, the largest in-scope companies would have to comply with sustainability due diligence requirements by 26 July 2028 (instead of 2027). To further support companies in preparing for the CSDDD, the Commission also accelerates the deadline for producing guidelines on how to conduct due diligence, setting it for July 2026.

Focus on direct business partners: Under the Omnibus package, in-scope companies in scope of the CSDDD would be required to conduct supply chain due diligence primarily on their direct suppliers ("tier 1"), rather than their entire value chain. Due diligence on indirect business partners further up or down the chain is not entirely removed but is conditioned on the existence of information pointing to likely or actual adverse impacts at their level. That process will, however, still require companies to map their value chains beyond "tier 1" partners to identify general areas where adverse impacts are most likely to occur and to be more severe. This somewhat aligns the CSDDD with the approach adopted under the German Supply Chain Due Diligence Act, which entered into force on 1 January 2023.

The EU Commission also proposes to reduce the much-debated "trickle-down effect" by limiting the information that in-scope companies can request from business partners with fewer than 500 employees as part of their mapping operations (see also above under 2.1).

Extension of assessment intervals: The EU Commission also proposes to extend the intervals between periodic assessments from one to five years. However, an in-scope company would still have to conduct more frequent ad hoc assessments and take appropriate action if it has reasonable doubts about the adequacy or effectiveness of its existing due diligence measures.

Replacement of EU civil liability with national civil liability regimes: The EU Commission further suggests removing the EU-wide civil liability regime and standing requirements currently provided for in the CSDDD, leaving it to the Member States to define the applicable regimes under domestic laws.

Fines: Omnibus package proposes to remove the provision that sets a minimum fine cap of 5% of a company’s global turnover and to eliminate the requirement for Member States to base pecuniary penalties on a company's net worldwide turnover. Instead the Commission would be responsible for issuing guidelines on penalty frameworks, granting Member States greater discretion in setting fines.

2.3 Other Proposed Changes

The package includes a number of other adjustments to the CSRD and CSDDD. A notable one relates to climate transition planning, where the requirement to "put into effect" a plan will be deleted in favour of a softer requirement to report on a plan including implementation actions planned and taken.

It also includes proposals to amend other sustainability rules, including the Carbon Border Adjustment Mechanism and the Taxonomy Regulation.

3 Implications for Swiss Companies

The Omnibus proposals will now need to be debated and agreed on by the European Parliament and Council, with potential parts of the legislative process being "fast tracked".

Whilst the timing and steps of the process remain unclear, what is clear is that the proposed amendments will have an important direct and indirect impact for a number of companies and groups headquartered in Switzerland.

As highlighted in previous insights, Switzerland is in the process of revising its Code of Obligations to align sustainability reporting requirements with the CSRD. The public consultation process ended in October 2024. The proposed amendments to the Swiss Code of Obligations would significantly broaden the scope of companies subject to mandatory reporting, particularly by lowering the employee threshold to 250, in line with the (current) CSRD. Given the recent amendments introduced by the Omnibus package, including the increase of the CSRD employee threshold to 1'000, it is expected that the Swiss Federal Council will closely monitor ongoing discussions between the European Parliament and Council. These developments may very well influence both the final scope Swiss sustainability reporting requirements and the timeline for revising the rules.

Despite these changes, sustainability reporting remains important for Swiss companies, as investors and financial institution continue to expect transparency and sound sustainability risk management practices before making their financing and investment decisions. In this respect, it is noteworthy that the EU omnibus proposal does not change the double materiality approach.

Regardless of the proposed changes to the CSRD and CSDDD, Swiss companies will continue to be subject (directly or indirectly) to other supply chain regulations. These include the existing Swiss supply chain due diligence framework, other EU requirements, such as the (much debated) EU Deforestation-free Products Regulation, and foreign domestic due diligence regulations with extraterritorial reach, such as the German Supply Chain Due Diligence Act.

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