The EU Omnibus Directive introduces key changes to the Taxonomy framework, particularly impacting reporting obligations under the Corporate Sustainability Reporting Directive (CSRD) and Taxonomy Regulation. The European Commission has proposed amendments aimed at streamlining Taxonomy disclosures, reducing reporting burdens, and increasing clarity for businesses.

Voluntary Taxonomy Reporting

Under the EU Omnibus Directive, companies that fall within the upcoming CSRD scope—specifically large enterprises with more than 1,000 employees and a net turnover of up to 450 million euros—will have the option to report their Taxonomy alignment voluntarily. This adjustment significantly reduces the number of companies required to disclose Taxonomy-related data, alleviating compliance pressures.

Additionally, businesses that have made substantial progress toward sustainability goals but only meet select EU Taxonomy criteria can choose to disclose their partial Taxonomy alignment. This provision allows such entities to showcase their ongoing efforts and receive acknowledgment for their commitment to achieving full alignment over time.

To enhance uniformity in reporting, the EU Omnibus Directive mandates the European Commission to develop delegated acts that will standardize the content and presentation of Taxonomy disclosures.

Proposed Amendments to Taxonomy Delegated Acts

The Commission has also opened consultations on proposed amendments to the Taxonomy Disclosures Delegated Act and the Taxonomy Climate and Environmental Delegated Acts. The primary objectives of these revisions include:

• Simplified Reporting Templates: The proposed changes will streamline reporting templates, reducing data points by approximately 70%, thereby making compliance more efficient.
  
  
• Materiality-Based Exemptions: Companies will be exempt from evaluating Taxonomy eligibility and alignment for economic activities deemed financially immaterial to their business. Specifically, activities that constitute less than 10% of total turnover, capital expenditure, or total assets will not require assessment.
  
  
• Revised Key Performance Indicators (KPIs) for Financial Institutions: The amendments propose changes to key financial sector indicators, particularly the Green Asset Ratio (GAR) for banks. Under the new framework, banks may exclude exposures linked to companies that do not fall within the future CSRD scope (i.e., entities with fewer than 1,000 employees and not classified as large undertakings) from their GAR denominator.

Public Consultation on “Do No Significant Harm” Criteria

The Commission is also seeking feedback on two alternative approaches to simplifying the “Do No Significant Harm” (DNSH) criteria, particularly concerning pollution prevention and the use of chemicals across various economic sectors under the EU Taxonomy. Stakeholders are encouraged to provide input on both proposed options, contributing to a more practical and effective implementation of these sustainability criteria.

These proposed amendments represent a shift toward more flexible, efficient, and business-friendly sustainability reporting while maintaining the EU’s commitment to transparency and environmental accountability.