CSRD’s Omnibus Update: One step forward or two steps back?

Deregulation doesn’t erase climate risk – it just makes it harder to measure. 

 

“Simplification”, “Deregulation”, “Reducing the burden” – sounds nice on paper. But here’s the real question: How exactly does softening reporting requirements help bridge the €800bn annual investment gap needed for Europe’s decarbonisation? 

 

Let’s be clear: climate risks don’t disappear just because we report less on them. Investors still need to protect value, manage risk, and plan for the long term.  This is not a ‘nice to have’, sustainability risks need to be understood to protect asset value, and that starts with data. Less reporting means less oversight, fewer insights, and – ironically – even more uncertainty. 

 

If the goal is to make sustainable investment easier, why are we making risk harder to track? 

  

Background: What the EU’s Latest CSRD Updates Would Mean for Businesses  

The European Commission’s proposed updates to the Corporate Sustainability Reporting Directive (CSRD) will reshape sustainability reporting obligations for businesses operating in the EU. 

 

It’s important to note that these proposals have not yet come into effect. Any changes would need to be agreed upon by both the European Parliament and the Council, which takes time. Until a final decision is made, businesses should stay prepared and keep up to date with regulatory developments.  

 

We recently hosted a webinar on Demystifying CSRD, where we explored the requirements, challenges, and strategies for compliance – watch the recorded session to get a better understanding of the current state of CSRD.  

 

The proposed Omnibus updates introduce key changes that will directly impact real estate investors, asset managers, and sustainability teams.  

  

Key Updates to CSRD
The newly announced proposals intends to focus on simplification, flexibility, and alignment with existing frameworks:  

• Scope Reduction – the CSRD will now apply only to companies with more than 1,000 employees and either a turnover above EUR 50 million or a balance sheet total above EUR 25 million.  
• Delayed Implementation for Some Requirements – companies will now have more time to adjust to reporting obligations, with phased-in flexibility for certain disclosures.
• Reduced Reporting Complexity – the Commission is refining the ESRS to prevent excessive reporting burdens, particularly for smaller businesses.
• Alignment with International Standards – efforts to harmonise CSRD with ISSB and GRI frameworks will ensure consistency across jurisdictions.
• Materiality Adjustments – companies will have more guidance on how to assess and disclose material sustainability risks and opportunities.  

  

What This Means for the Real Estate Investment Industry 

For real asset investors, the implications of these updates are significant:  

• More Time for Preparation – if your reporting timeline is affected by the delays, this provides an opportunity to refine your data collection, governance structures, and internal reporting processes. 
• Refined Materiality Focus – businesses will need to reassess their materiality approach to ensure disclosures align with updated guidance.  
• International Consistency – companies reporting across multiple jurisdictions will benefit from closer alignment with ISSB and GRI standards.  
• Less Administrative Burden – the simplifications mean businesses can streamline their ESG reporting workflows, freeing up resources for strategic sustainability initiatives.  

 

The proposal and its consequences might look like a win for businesses on paper; less red tape, more flexibility, and reduced admin time, but understanding of impacts, risks and opportunities is still essential.  Irrespective of reporting regulations, we recommend that real estate investors assess and regularly review materiality associated with sustainability risks. 

  

Less Reporting, Less Burden, More Uncertainty?

Before you sit back and relax, thankful for the Omnibus breather, think of it this way: 

‘More Time for Preparation’ – Will the prolonged timeline be spent on procrastination or improvements? If investors simply stop tracking risks now, they’re only kicking the can down the road. EVORA’s recommendations to investment managers: Use the time wisely.  

‘Refined Materiality Focus– If companies have more flexibility in what they disclose, how will investors know if they’re missing red flags?  EVORA’s recommendation: Think about how to articulate materiality to investors in a way that is understood 

‘Less Administrative Burden’ – But does that mean less visibility on what’s coming?  EVORA’s recommendation: Plan regular reviews to track impacts and regulatory changes coming down the tracks. 

 

Investors should question whether reduced reporting actually benefits them. Will they still get the information they need to make informed decisions? 

 

The Omnibus changes merely shift the balance of responsibility. Less mandated reporting doesn’t mean less risk – it may mean that investors will have to dig deeper to get the full picture. If companies report less, how will investors price in climate and nature risks? And if we already have an €800bn annual investment gap, does dialling back on disclosure help or hurt the transition? 

  

Next Steps: How to Stay Ahead  

1. Assess Eligibility – determine if your company falls within the revised scope of the CSRD based on employee count. 
2. Review Your Reporting Roadmap – for companies still under CSRD obligations, assess how these changes impact your CSRD compliance timeline and whether strategic adjustments are needed. 
3. Enhance Data Readiness – companies should ensure data is structured in a way that meets multiple reporting standards. 
4. Engage with Experts – seek strategic guidance on how these refinements affect your sector and how to maximise the value of sustainability reporting beyond compliance. 

 

Do not scale back your Sustainability strategies but ensure you are focused on impacts that are of critical materiality – regulation might loosen today, but stakeholder expectations (from investors, the public, and tenants) will likely catch up – and those who thought Omnibus was a nice breather will struggle to keep up later down the line. 

 

Even for companies outside the revised scope, voluntary CSRD reporting remains best practice. It prepares businesses for future mandates, strengthens their overall ESG approach, and ensures they meet the growing expectations of stakeholders and investors, who may still request CSRD-style reporting. If we stop tracking the data, we don’t just lose sight of the problem – we lose control over the solution. 

 

At EVORA, we help businesses navigate evolving sustainability regulations, helping to convert obligations into opportunity. If you’d like to discuss how these changes impact your organisation, get in touch.