The new Omnibus Package and ESG taxonomy

Recent discussions have focused on the EU institutions’ evolving stance on ESG (Environmental, Social and Governance) reporting. A central element of these changes is the so-called Omnibus Package, which introduces substantial amendments to both existing and forthcoming regulations—particularly the Corporate Sustainability Reporting Directive (CSRD) and the EU Taxonomy-related implementing measures.

A new direction from the European Commission: deregulation, not abandonment of the Green Deal

The European Commission has tabled a series of regulatory proposals, including the “Stop-the-Clock” component, approved by the European Parliament on 3 April 2025. These changes aim to simplify reporting obligations, especially for SMEs and mid-sized companies. Thresholds for mandatory reporting are set to be relaxed, and timelines for including additional company groups in the scope of obligations will be extended. What do these adjustments mean for taxonomy disclosures?

Key ESG taxonomy changes introduced by the Omnibus package

The ESG taxonomy—an integral part of the EU’s sustainable finance framework—is also subject to revision under the Omnibus Package. Amendments have been proposed to both the CSRD and its implementing measures. The main changes include:

• Partial alignment reporting permitted: Previously, only fully taxonomy-aligned activities could be reported. The new approach allows for reporting of partially aligned activities, providing greater flexibility.
• Materiality threshold introduced: A financial materiality threshold for taxonomy reporting will apply. Reporting templates will be reduced by around 70%, significantly cutting administrative burdens.
• Simplified technical screening criteria: Particularly regarding pollution prevention and control (Annex C), criteria will be streamlined.
• Adjustment of Green Asset Ratio (GAR): Financial institutions may exclude exposures related to activities outside the CSRD scope from the GAR denominator.
• Exemption for non-material activities: Companies may omit assessments of eligibility and alignment for activities that are financially insignificant (e.g. generating less than 10% of total turnover, capital expenditure or total assets).

Voluntary taxonomy reporting for certain companies

One notable feature of the Omnibus Package is the introduction of voluntary taxonomy reporting for a specific category of entities—namely, large companies employing over 1,000 staff but generating less than EUR 450 million in annual net turnover. Previously, all entities exceeding the 1,000-employee threshold were required to report taxonomy alignment.

How will the changes affect businesses?

The proposed and planned taxonomy adjustments are part of a broader deregulatory trend observed globally. While the final regulatory shape is still pending, it is clear that the Omnibus Package does not represent a step back from the ESG objectives of the Green Deal. On the contrary, ESG reporting and taxonomy remain high on the EU’s regulatory agenda. The proposed changes primarily aim to optimise and tailor the framework.

Why ESG taxonomy still matters

The taxonomy is more than a reporting obligation—it is a strategic tool. It enables investors, financial institutions and stakeholders to assess the environmental sustainability of a company’s operations. Proper preparation for taxonomy obligations is essential for ensuring access to capital, enhancing reputation, and aligning with ESG strategies.

How can we help?

ESG taxonomy sits at the intersection of financial analysis and environmental technicalities. MDDP experts assist clients in accurately preparing and disclosing taxonomy data. Contact us to discuss your obligations, avoid common pitfalls, and develop an efficient reporting strategy.