What is the Omnibus package

The Omnibus package is a regulatory simplification initiative through which the European Commission proposed amendments to several existing sustainability and investment regulations. In the context of ESG reporting, its stated objective is to reduce operational complexity and administrative burden, while maintaining the overall framework of transparency required by the market and EU regulation.

Substantively, the Omnibus proposal does not eliminate sustainability reporting, but rather reshapes its scope and simplifies certain components. The Commission indicated that, within the area of sustainability reporting, the proposed changes would remove approximately 80% of companies initially included in the scope. Reporting obligations would remain primarily for companies with more than 1,000 employees and, in the Commission’s proposal, also exceeding €50 million in turnover or €25 million in total assets.

This is a key point, as it signals a shift in approach: from rapidly extending ESG reporting to a broad base of companies, to a more selective model focused on larger organizations.

What is the “stop-the-clock” directive

The “stop-the-clock” directive is the measure through which the EU formally postponed the application of certain reporting obligations. Specifically, Directive (EU) 2025/794, published in the Official Journal of the European Union on April 16, 2025, delayed by two years the entry into force of reporting requirements for companies that were expected to report for the first time on the 2025 and 2026 financial years—namely, the so-called wave 2 and wave 3 companies. The directive entered into force on April 17, 2025.

In practice, the mechanism does not remove obligations but temporarily suspends them, allowing co-legislators time to agree on the substantive changes proposed under the Omnibus package. The Council of the EU also clarified that the goal was to provide legal certainty to companies while simplification efforts were ongoing. Member States are required to transpose this directive by December 31, 2025.

This means that in 2026, many companies that expected to fall within mandatory reporting requirements have gained additional time. However, this does not make 2026 a “blank year”—it is a transition year, during which companies must prepare for a regulatory framework that is still evolving.

What actually changes for companies in 2026

The most visible changes concern two aspects: timelines and scope.

From a timeline perspective, the stop-the-clock directive has postponed the first-time reporting requirements for second and third wave companies. In practical terms, companies that were expected to start reporting for the 2025 or 2026 financial years are no longer required to do so according to the original schedule. The European Commission summarizes the measure clearly: the delay applies to companies that would have reported for the first time in those financial years.

From a scope perspective, the Omnibus package introduces a significant restriction. Under the Commission’s proposal, reporting would remain mandatory only for large companies with more than 1,000 employees and at least one of the economic thresholds mentioned above. Subsequent political negotiations led to an even stricter formulation, referring to companies with more than 1,000 employees and over €450 million in annual net turnover. In February 2026, the Council confirmed this framework as part of the approved simplification.

For companies, this creates a very practical challenge: in 2026, postponed obligations coexist with substantive changes that have already been politically agreed or approved at EU level. It is therefore essential to distinguish between what is formally in force (the delay) and what will ultimately apply based on the legislative process and national transposition.

Who remains in scope and who is excluded

From a practical business perspective, the message is clear: many companies that were preparing for mandatory reporting under the original framework may now find themselves outside the scope or facing significantly extended timelines.

Companies already included in the first wave—those that had already begun reporting before the delay—remain fully in scope. The stop-the-clock directive did not suspend requirements for these entities. By contrast, second and third wave companies are the ones that benefited from the two-year postponement.

For non-EU groups, thresholds have also been increased. According to the Council, updated requirements apply only to non-EU groups generating more than €450 million in turnover within the EU, along with higher thresholds for significant subsidiaries or branches.

The result is a substantial narrowing of the mandatory reporting scope. However, this does not translate into reduced demand for ESG information in the market.

Why ESG Reporting Remains Important Even Without Obligation

Perhaps the most important—and often misunderstood—point is that narrowing the regulatory scope does not eliminate demand for ESG data. In many cases, it actually makes it more selective and market-driven.

In its Omnibus proposal, the European Commission explicitly linked simplification to the need to prevent excessive burdens from cascading down the value chain to smaller companies. This means that the value chain remains central: even if an SME is not directly required to publish a full report, it may still receive ESG data requests from clients, banks, investors, or larger companies.

Moreover, both the Council and the European Parliament have emphasized simplification—not the abandonment—of ESG transparency. The proposed changes aim to make reporting more quantitative, eliminate mandatory sector-specific standards, and focus on larger entities, but they do not question the relevance of environmental and social information for financial markets and the European economy.

As a result, in 2026 many companies find themselves in a unique position: they may not have an immediate legal obligation to report, but they still have strong incentives to structure ESG data, as it remains essential for financing, procurement, due diligence, and market access.

What Happens to ESRS Standards

Another area impacted by the Omnibus package concerns the ESRS (European Sustainability Reporting Standards).

The Commission’s proposal and subsequent political agreement clearly point toward simplification: reducing the number of required datapoints, focusing more on measurable information, and abandoning the idea of mandatory sector-specific standards. The European Parliament has noted that simplification efforts aim to make reporting more quantitative, with sector-specific standards becoming voluntary rather than mandatory.

For companies, this has two key implications. First, the technical reporting framework is still evolving and requires continuous monitoring. Second, even in a simplified environment, the main challenge is not just the number of datapoints, but the ability to collect consistent, traceable, and verifiable data across processes and supply chains.

Operational Implications for Companies

From an operational standpoint, 2026 is not a year to “wait and see.” It is a year to clarify positioning and build solid foundations.

Companies should first assess whether they still fall within the scope under the new thresholds, keeping in mind that the regulatory framework has changed and that final application depends on legislative outcomes and national transposition. They should then evaluate whether, even outside direct obligation, they remain exposed to ESG data requests across the value chain. Finally, they should recognize that the delays introduced by the stop-the-clock directive do not eliminate the need to organize ESG data—they simply shift the timeline for when that data must be audit-ready.

In other words, the main risk for many companies is interpreting the delay as a full pause. In reality, those who use this time to structure processes, KPIs, and data collection will be far better prepared when the regulatory framework becomes fully consolidated.

How Metrikflow Can Support You

In this transition phase, the real value lies not only in understanding whether obligations have been postponed, but in building a system that makes ESG reporting manageable and reliable.

Metrikflow is an ESG software platform that helps companies centralize sustainability data, structure data collection across the supply chain, monitor ESG KPIs, and prepare robust reporting processes—both for regulatory compliance and market expectations.