Act now instead of waiting: Why companies should start looking at carbon footprinting and non-financial reporting today

“The sustainable transformation of the economy: new beginnings or stagnation?” These are the opening words of the Sustainability Transformation Monitor 2025 (STM25), which examines the status of the sustainability transformation in the German economy.

The results show that more and more companies are creating internal structures to promote sustainable processes and meet regulatory requirements. Many companies are “ready”, but medium-sized companies in particular also see the reporting obligation as being associated with a great deal of effort. According to the study, a lack of resources and limited data availability are the biggest obstacles to sustainable transformation.

It is also unclear what the future involvement of companies that may not be covered by the CSRD after all, but have already begun their journey, will look like. They need to keep a close eye on the development of the EU omnibus proposal and make the most of the “foggy phase” now.

What is the current status of the omnibus procedure[as of May 2025]?

Anyone involved in sustainability reporting will certainly have added the word “omnibus” to their vocabulary. Omnibus in this context means “all-encompassing” and in this context stands for the bundling and simplification of various legislative amendments in a joint procedure.

The EU’s omnibus procedure to simplify sustainability reporting obligations (in particular CSRD, CSDDD and EU taxonomy) entered a decisive phase in spring 2025. Below are the most important developments and the current status:

• On February 26, 2025, the EU Commission presented a comprehensive omnibus proposal. The aim is to significantly simplify the reporting obligations for companies, severely limit the group of users and postpone deadlines.
• The proposal envisages a drastic reduction in reporting obligations. In future, only companies with more than 1,000 employees and a turnover of at least € 50 million will be subject to the CSRD reporting obligation. This corresponds to a reduction of around 80 % of the companies previously subject to the obligation.
• In addition to the substantive proposals, the EU published Directive (EU) 2025/794 on the so-called “stop-the-clock” regulation in the EU Official Journal on April 16, 2025. The EU member states now have until December 31, 2025 to transpose the EU directive into national law. For companies in the second and third wave of transposition, this means a postponement of the reporting obligation by up to two years in some cases. We have described exactly what this means in this blog post.

Here is an overview of the main changes proposed for the ESRS:

The scope of application is to be drastically reduced. This means companies > 1,000 employees (previously: > 250 employees) (criterion 1) and additionally (criterion 2) > € 50 million turnover OR > € 25 million balance sheet total. This means that companies > 250 employees and smaller > 1,000 employees are no longer required to report.

• For third countries , the following should apply: > € 450 million turnover (previously € 150 million turnover) AND “Large company according to the EU Accounting Directive (turnover: € 50 million, balance sheet total: € 25 million, 250 employees)” OR EU branch with net sales > € 50 million. The criterion of 1,000 employees should not apply to third countries.
• Removal of sector-specific reporting standards: companies no longer have to report according to sector-specific requirements.
• Reduction and simplification of data points. Focus on quantitative data points.
• Limitation of the audit to limited assurance.
• Trickle-down effect in the supply chains is to be limited by a new value chain cap (only certain information may be requested from suppliers). It is planned to use the voluntary SME standard based on ESRS (the VSME, Voluntary Sustainability Reporting Standard for Small and Medium-Sized Enterprises) as a guide.

These are the main changes proposed to the EU taxonomy:

• Mandatory for companies
  • > 1,000 employees
  • > 450 million € turnover
• Opt-in for companies < € 450 million turnover, provided claims are made regarding sustainability quotas, incl. facilitations.
• Introduction of a materiality threshold; the reporting obligation should only apply from a 10% turnover/CapEx/OpEx threshold.
• OpEx disclosures are voluntary if < 25 % of total sales revenue.
• DNSH criteria (do no significant harm) are revised and simplified.
• Simplification of reporting templates (fewer data points required).
• Easier green asset ratio for financial institutions

What can companies do now?

“Stop the clock” has been decided, but a decision by the EU Commission on the content proposals (scope reporting obligation, ESRS revisions EFRAG) is not expected until the end of 2025. A final and ready-to-use ESRS standard is not expected until mid-2026.

It is now important to use the time correctly. The next steps for a company also depend on this,

• how many employees the company has
• where the company currently stands and
• what ambition it has.

It is important to know that there is no “best practice” guidance. However, as the reporting obligation is not going away – not even for Swiss companies – it is important to consider how to navigate through the “foggy phase”. It is a matter of moving forward in the face of uncertainty, especially for companies in the EU with more than 1000 employees.

The reporting obligation for companies with fewer than 1000 employees is uncertain. The threshold of 750 employees is occasionally mentioned in the discussion as a theoretical compromise should negotiations between Parliament and the Council take place during the legislative process.

Tip for companies with more than 1,000 employees, a balance sheet total of at least EUR 25 million or a turnover of more than EUR 50 million (subject to reporting under the omnibus proposal):

• Define how and with what ambition you want to continue, even if the future ESRS content is not yet clear.

• Ask yourself where it might be worth investing less energy.
• Ask yourself where you need to catch up and where you need more speed and consistency.

Tip for companies with 250-1000 employees:

You should ask yourself how the period of uncertainty should be structured until it is clear whether you will be subject to reporting obligations. It is important to consider which path to take if the obligation no longer applies.

• Are there stakeholders who nevertheless demand certain non-financial information?
• How relevant are these stakeholders and what information do they want in the future?
• Which voluntary standard would be suitable for the company? AGILITA, for example, has opted for GWÖ. But is the VSME or a voluntary orientation towards the ESRS perhaps the better choice? This also depends on what is perhaps established in the industry.

The VSME standard (Voluntary Sustainability Reporting Standard for Small and Medium-Sized Enterprises), for example, is a voluntary, modular standard for sustainability reporting by small and medium-sized enterprises (SMEs) that was developed by EFRAG on behalf of the EU Commission. It is intended for unlisted small and medium-sized enterprises (SMEs) with fewer than 1,000 employees that are not directly covered by the CSRD, formerly CSRD-liable companies that are exempt from the obligation as a result of the omnibus proposal but wish to continue reporting in a structured manner.

Tip for Swiss companies:

Larger companies in Switzerland with more than 500 employees, CHF 20 million in total assets and CHF 40 million in turnover are already required to publish a sustainability report

The new EU proposal states that companies from third countries, such as Switzerland, will only have to submit a sustainability report in accordance with CSRD in future if they generate > €450 million in turnover (previously €150 million turnover) AND are a “large enterprise in accordance with the EU Accounting Directive (turnover: €50 million, balance sheet total: €25 million, 250 employees)” OR have a branch in the EU with net turnover > €50 million. If you already know that you will be required to report, you can use the questions in our first tip to help you.

The general rule is to wait and see, but stay prepared. As the change in the law has not yet been finally adopted, companies should follow developments closely and not completely stop their internal sustainability processes, but keep them on standby.

It is to be expected that Swiss legislation will be oriented towards the EU. Swiss companies with close business relationships with the EU – especially listed companies or those with large EU customers – would have to adapt to the (simplified) EU reporting obligations in order to continue to be considered reliable partners.

In its press release dated March 21, 2025, the Federal Council reaffirms its intention to adapt Swiss law to international standards. However, in view of the latest legislative developments in the EU, Swiss companies still have to wait and see how the draft revision of Art. 964a et seq. of the Swiss Code of Obligations will proceed. The Federal Council has set itself a deadline of spring 2026 to decide how to proceed with the preliminary draft.

Do not stop preparations completely. Companies that have already started sustainability reporting should not abruptly stop ongoing projects, but should continue on a low flame until there is legal certainty. Use this phase to get to grips with the data. In most cases, data availability and quality are the biggest challenges, which are not only relevant for a sustainability report, but also with regard to other requirements such as the Digital Product Passport (DPP), which will be mandatory for the first product groups in the EU from January 2027 and must be fulfilled by Swiss companies that export products to the EU or are part of EU supply chains from 2027.

observe the value chain. Even if you were no longer required to report yourself, larger business partners could still request sustainability data in order to fulfill their own reporting obligations. Although the Omnibus Initiative aims to reduce this “pressure to disclose”, a certain amount of information is still required.

Weigh up voluntary reporting. Check whether voluntary sustainability reporting could make strategic sense, for example to position yourself in the market or to meet customer requirements.