techUK take on the EU ESG Omnibus
The EU announced proposals to majorly water down EU sustainability reporting rules to ease the compliance burden for companies who feel they have been caught in a regulatory tsunami recently. Originally announced last year and heavily trailed in the last few weeks this package (rightly or wrongly) is a key part of EU efforts to address concerns on the administrative burdens felt by businesses.
This is being done by introducing a new ‘Omnibus’ (two actually!) which will amend two key laws, and the main change is reducing the number of firms in scope of the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD or CS3D) and removing some of the detailed complicated provisions.
This objective will be achieved by jacking up the compliance thresholds (to 1000 staff or €50m turnover) which will cut the number of firms required to do CSRD report by 80% (one estimate is 10k firms rather than 50k firms) and by simplifying the data points companies use to assess their material risks. On due diligence, the EU proposes cutting the requirements and needing to do due diligence less frequently and limiting it to direct business partners.
For both laws, there will be a delayed implementation (to 2028) which will give businesses the time to get ready and reduce the costs associated with a rushed implementation.
In addition, there are changes to reduce the burdens associated with the EU Taxonomy (where companies disclose what they do so investors can funnel cash into ‘green' businesses) and by upping the tonnage threshold for CBAM (a new tax for carbon-intensive commodities) which exludes 90% of imports.
While some businesses will see this as welcome (harmonisation of due diligence has been a big ask from the tech sector), there is a big part of the industry that is somewhat flabbergasted. There have been big efforts from tech firms in getting ready for these laws, not to mention significant sums of money on building new functions, hiring additional expertise (or consultancy), and in-house resources being devoted to compliance (we even run an informal CSRD support group for members). It is also important to highlight that tech firms (particularly manufacturers) have been ahead of most other industries in corporate reporting and supply chain transparency.
The proposals will now be before the usual EU legislative procedure so it is also vital to remember) that these are live proposals that could change due to MEP and Member State scrutiny as well as lobbying from business groups or NGOs.
For techUK this puts us in a tricky position when we speak to policy makers here. We’ve been advocating for maximum interoperability of taxonomies, alignment on due diligence (as we think the Modern Slavery Act is out of date) and as government prepares to introduce sustainability disclosures based on the global ISSB standards. However, the EU proposals mean we must now understand what the collective hive-mind of the tech sector wants from the UK in light of these changes.
A full summary of the proposals was shared with members and we will be discussing this at length in our Responsible Business Conduct Group on 6 March and Digital Europe will be doing much of the heavy lifting for the sector in Brussels.
Craig Melson
Craig is Associate Director for Climate, Environment and Sustainability and leads on our work in these areas ranging from climate change, ESG disclosures and due diligence, through to circular economy, business and human rights, conflict minerals and post-Brexit regulation.
Lucas Banach
Lucas Banach is Programme Assistant at techUK, he works on a range of programmes including Data Centres; Climate, Environment & Sustainability; Market Access and Smart Infrastructure and Systems.
Alec Bartishevich
Alec joined techUK in 2025 as the Programme Manager for Sustainability within the Climate, Environment, and Sustainability Programme.