What the EU Omnibus proposal means for apparel and footwear brands

 Status:  ✅ Approved EU legislative package (amending CSRD and CSDDD)

As a key part of the EU’s Competitiveness Compass, the Omnibus I Simplification Package – approved in Dcember 2025 – aims to streamline corporate sustainability reporting by introducing changes to:

• The Corporate Social Responsibility Directive (CSRD)
• The Corporate Social Due Diligence Directive (CSDDD)

During the legislative process, some businesses that have already invested significantly in compliance have expressed reservations about the proposed adjustments. Companies like Primark, L’Occitane, Nestlé, and NEI Investments are urging the Commission not to weaken sustainability reporting standards, warning that such changes could undermine business certainty and investment.

However, the Commission emphasizes that Omnibus I aims to simplify sustainability reporting across Member States while preserving core environmental objectives. As a result, the legislation remains focused on the largest brands, which account for the majority of environmental impacts.

Let’s dive in to see what these changes mean for apparel and footwear brands.

TL;DR: Main Changes

1. CSRD: Only brands with more than 1,000 employees and over €450 million in annual turnover are required to report on sustainability.

2. CSDDD: Due diligence obligations apply only to brands with over 5,000 employees and more than €1.5 billion in annual turnover.

3. A digital portal will provide standardised templates and guidance to support businesses with reporting requirements.

About Omnibus I Simplification Package

In EU policymaking, “omnibus” is commonly used as shorthand for legislative simplification. The European Commission regularly introduces multiple omnibus packages, each addressing a different policy area and numbered separately. For example, Omnibus VI  focuses on simplifying EU chemical legislation, while Omnibus II targets the simplification of EU investment frameworks. 

Omnibus I sits within this broader simplification agenda and focuses on corporate sustainability reporting and due diligence, with the objective of simplifying EU sustainability rules, supporting competitiveness, and reducing administrative burdens for brands. 

The package was approved through the EU’s formal legislative process in December 2025, introducing legally binding changes to existing sustainability legislation, including the CSRD and the CSDDD.

EU Member States are expected to give final approval in early 2026, a formal step that will allow the amendments to enter into law.

Main Elements of the Omnibus I Simplification Package

(Note: Original Omnibus package referenced adjustments to CBAM and EU Taxonomy; however, the current political agreement covers only CSRD and CSDDD.)

Key Changes to the CSRD

• Narrowed Scope: Only brands with more than 1,000 employees and over €450 million in annual net turnover remain in scope for CSRD
• Transition Exemption: Brands that started reporting for the financial year 2024 but fall out of scope under Omnibus I receive a transition exemption and are not required to report for FY 2025 and FY 2026.
• Exclusion of SMEs: Listed SMEs are removed from mandatory CSRD reporting and may instead apply the VSME ESRS (Voluntary SME Standard).
• Digital Reporting Portal: The Commission will develop a centralised digital portal offering reporting templates and guidance to support compliance.
• Voluntary Sector Standards: Reporting becomes simplified, with sector-specific European Sustainability Reporting Standards (ESRS) made voluntary. The European Commission is currently revising ESRS.

Learn all about the Corporate Sustainability Reporting Directive requirements for apparel and footwear here.

Key Changes to the CSDDD

• Narrowed Scope: Only brands with more than 5,000 employees and over €1.5 billion in annual net turnover fall within the scope of the CSDDD. For non-EU brands, the threshold is €1.5 billion in EU-generated turnover.
• Removal of Transition Plan Requirement: Brands are no longer required to adopt a climate transition plan under the CSDDD. (Note: Under CSRD, companies must still disclose a transition plan if they have one.)
• Removal of EU-Wide Civil Liability: EU-level harmonised civil liability rules are deleted. Liability will instead be determined under national laws, and fines may not exceed 3% of global net turnover.
• Revised Due-Diligence Process: Due diligence begins with an initial scoping assessment (at tier-1 level) based on reasonably available information to identify the most likely and severe adverse impacts. More detailed assessment and engagement with business partners follow only where risks are identified.

• Reporting Frequency: Brands must report on their due diligence measures every four years, rather than annually.

Learn all about the Corporate Sustainability Due Diligence Directive for apparel and footwear brands here.

"Stop-the-clock" Directive

As part of the EU’s Omnibus I Simplification Package, the Stop-the-Clock mechanism was adopted in April 2025, delaying the application of certain CSRD and CSDDD requirements. 

Corporate Sustainability Reporting Directive Timeline:

As part of the EU’s Omnibus I Simplification Package, the Stop-the-Clock mechanism was adopted in April 2025, delaying the application of certain CSRD and CSDDD requirements. While the CSRD was initially introduced through a wave-based rollout, Omnibus I simplifies this by limiting CSRD to a smaller group of companies defined by clear employee and turnover thresholds – meaning brands with more than 1,000 employees AND over €450 million in net annual turnover remain in scope.

• Wave 1 – NFRD brands
  • Who:  Listed EU public-interest entities with more than 500 employees, already subject to the former Non-Financial Reporting Directive (NFRD).*
  • When: No change, reporting started in 2025 for the 2024 financial year.

• Large EU brands (previously wave 2)
  • Who: Fashion companies with more than 1,000 employees and over €450 million in net annual turnover.
  • When: First reporting in 2028, covering the 2027 financial year (two-year delay).

• Listed SMEs (previously wave 3)
  • Who: EU-listed SMEs.
  • Status: Removed from CSRD scope under Omnibus I  reporting will be voluntary under a simplified standard based on VSME ESRS (Voluntary SME Standard).

• Non-EU brands (previously wave 4)
  • Who: Non-EU parent companies generating more than €450 million in net turnover within the EU, with activity through an EU subsidiary or branch.
  • When: No change, first reporting in 2029 for the 2028 financial year.

*You may already be aware of the Non-Financial Reporting Directive (NFRD), which introduced similar reporting requirements in the EU. These were deemed insufficient, and in 2021, the CSRD replaced and expanded the NFRD's reporting requirements.

Important to note: Brands with fewer than 1,000 employees or less than €450 million in net annual turnover fall outside of the CSRD scope and do not need to report. E.g., a fashion brand with 900 employees and €600 million in net annual turnover -> not in scope.

Key Agreed Changes for Corporate Sustainability Due Diligence Directive

After Omnibus I, only one group of very large companies is subject to mandatory due diligence obligations.

• Who: Companies with more than 5,000 employees and over €1.5 billion in global turnover.

• When: Implementation of CSDDD into national law has been postponed by one year. This means brands will first be required to comply with due-diligence obligations in 2029, covering activities carried out in 2028.

Why Should Fashion Brands Continue Preparing for Compliance?

While brands technically have until 2028/2029 to comply with the CSRD and the CSDDD, waiting until the last minute to decide on a solution significantly increases the risk of non-compliance. 

Waiting until closer to the deadline leaves limited time to gather and clean upstream data – a process that typically takes at least a year. Supplier data is often incomplete or inconsistent, and you may need to integrate complex systems like Product Lifecycle Management (PLM) to ensure full visibility. Rushing this work increases the likelihood of missing critical information and results in last-minute fixes that can be costly and inefficient.

By preparing your systems in 2026, you can avoid a rushed and expensive last -minute scramble. Getting ahead of the curve allows for smoother data collection, integration, and reporting processes, helping to ensure that you meet compliance requirements without compromising quality or accuracy.

How Carbonfact Can Help with EU Environmental Regulations

The evolving EU regulatory landscape means brands must navigate different scopes, timelines, and reporting requirements under CSRD, CSDDD, and other frameworks. As thresholds change and new simplifications are introduced, understanding which rules apply – and generating accurate, audit-ready disclosures – becomes increasingly complex for sustainability teams.

Carbonfact's platform acts like a bridge that simplifies all these different rules and methods. It helps brands by automatically applying the right rules and methods for each situation, so they don’t have to worry about the complexity of dealing with different regulations from around the world.

Here’s how: 

• Data collection: We consolidate and clean your diverse data sets, from any source, in any format. 
• Improve data and fill gaps: We analyze your data, detect errors, and fill in your gaps. Our data module - trained on extensive primary data sets - automatically fills in missing details like component weights, d-tex, and transport. 
• LCA: Our specialized algorithms then run detailed Life Cycle Assessments that transform raw numbers into meaningful environmental metrics. 
• Report: All this granular data is then shaped into automatically generated reporting frameworks, including CSRD, GHG, and others. 

By getting started with our platform today, you're not just checking compliance boxes – you're gaining actionable insights that drive smarter decisions about your environmental impact, no matter when the reporting deadlines ultimately fall.