Recently, companies have started to deal with the introduction of mandatory ESG reporting into their internal structures, but in the meantime, a new reform package called Omnibus is already on the table of the European Commission, which will fundamentally change the rules for mandatory non-financial reporting within the EU.
Why is the European Commission introducing new measures? The Omnibus reform package is a response to growing concerns about excessive regulatory burdens that could undermine the competitiveness of European businesses. It aims to simplify ESG reporting rules and make it easier for companies to adapt to the new requirements, while reconciling European ambitions towards sustainability with preserving the competitiveness of European businesses.
The Commission has therefore presented a proposal to reduce the administrative burden by up to 25 percent and by at least 35 percent, specifically for SMEs, by the end of the current mandate. The reform cuts across several pillars of ESG legislation – including the CSRD, CSDDD, CBAM regulations and the InvestEU programme.
Simply put: It is about reconciling the high sustainability ambitions of the past with the realities of the market and the ability of companies to manage these demands without fundamentally undermining their growth potential.
The European Commission estimates that ESG reporting in its current form has had a direct impact on around 50 thousand businesses in the European Union and indirectly on their suppliers. However, as a survey published by PwC Luxembourg showed, only 42 per cent of companies considered themselves ready to fully comply with the new requirements.
It is this low readiness, combined with geopolitical shifts in the US and Europe, that has prompted the European Commission to rethink the set-up of the whole system.
How Omnibus will change ESG reporting
Key changes in the pipeline include, in particular, an increase in the thresholds for mandatory ESG reporting, which means that the obligations will no longer apply to companies with 250 employees, but only to large companies with more than 1,000 employees. This will reduce the number of companies that have to carry out detailed non-financial reporting by around 80 per cent.
The omnibus package also regulates due diligence requirements. The new rules will now only apply to direct suppliers, meaning that businesses will no longer have to monitor the entire value chain, but only their direct partners. This modification relates to the Corporate Sustainability Due Diligence Directive (CSDDD).
European Commission also proposes a two-year deferral of sustainability reporting obligations for companies 2. and Wave 3, which were originally due to start these obligations in 2026 or 2027, with a new deadline of 2028. This measure, with the working title “stop-the-clock”, has already been formally approved by the European Parliament on 3 April 2025 . However, in order for it to come into force in Slovakia, it will still need to be incorporated into national legislation, namely into the Accounting Act 431/2002. In the meantime, the original deadlines remain in force.
At the same time, the Commission is committed to revising the European Sustainability Reporting Standards (ESRS). The revision will focus on reducing the number of mandatory data points, removing ambiguities in individual provisions, aligning with other EU legal frameworks and simplifying reporting requirements overall.
Voluntary reporting
Companies that will fall out of the scope of the CSRD as a result of the increase in thresholds (i.e. companies with less than 1 000 employees) will be able to voluntarily report according to the simplified standard developed by EFRAG for small and medium-sized enterprises (SMEs). This standard also serves as a safeguard mechanism, limiting the scope of information that large companies or financial institutions can request from smaller suppliers.
Only the largest companies will report
While until now ESG reporting applied to all large companies that exceeded at least two of the three thresholds (250 employees, turnover of €50 million or a balance sheet of €25 million), it will now apply only to companies with more than 1,000 employees and a turnover of more than €50 million or a balance sheet of more than €25 million. This will exclude a large number of entities from the new set-up, in particular medium-sized enterprises, which will be able to benefit from the aforementioned simplified voluntary standard based on the standards for SMEs.
In Slovakia, the mandatory ESG reporting under the forthcoming reform of European legislation will affect a relatively small number of companies. According to data from Finstat.sk, there are approximately 121 companies in Slovakia with more than 1,000 employees.
Given that Slovakia is dominated by small and medium-sized enterprises (SMEs), which account for approximately 99.9% of all businesses, most Slovak companies will not be directly affected by ESG reporting obligations. However, the voluntary standard will allow them to report based on the principles of applicability rather than double materiality as is the case with conventional ESG reporting. SMEs should therefore be aware that their larger corporate counterparts subject to CSRD rules may require consistent ESG data.
