CSRD Omnibus Directive 2026: New 1,000-Employee Threshold — Who Is Still In Scope?

On 26 February 2026, the EU formally adopted the Omnibus Simplification Directive (2026/470), the most significant revision to CSRD since its original adoption in 2022. The headline change: the employee threshold for mandatory sustainability reporting rises from 250 to 1,000 employees, and the turnover threshold increases to €50 million.

For sustainability teams, this is not a simplification — it is a scope earthquake. Companies that spent 2024 and 2025 building CSRD infrastructure may now find themselves technically out of scope. Others remain squarely in scope and face shorter preparation windows. And a third group — the "voluntarily compliant" — must decide whether to continue reporting under the new VSME framework or the full ESRS.

This article breaks down exactly what changed, who is affected, and what every company should do next.

What the Omnibus Directive Actually Changes

The New Thresholds

The original CSRD defined "large undertakings" using the EU Accounting Directive criteria: 250+ employees, €40M+ turnover, or €20M+ total assets (meeting two of three). The Omnibus revision replaces these with:

Employee threshold: raised from 250 to 1,000 employees
Turnover threshold: raised from €40M to €50M net turnover
Balance sheet threshold: raised from €20M to €25M total assets

The two-of-three test still applies. A company with 800 employees and €60M turnover but only €15M in assets would meet only one criterion (turnover) and fall outside mandatory scope.

Who Is Definitely Still In Scope

These companies are unaffected by the Omnibus changes:

Public-interest entities already reporting under Phase 1 (FY2024) — 500+ employees, listed or bank/insurance. These companies have already filed their first reports.
Listed companies regardless of size — the listing criterion remains independent of employee count.
Companies exceeding all three new thresholds — 1,000+ employees, €50M+ turnover, €25M+ assets.
Non-EU companies with €150M+ EU revenue and a qualifying EU subsidiary or branch. The third-country reporting rules remain unchanged.

Who Drops Out of Scope

Companies that met the old thresholds (250+ employees) but fall below the new ones (under 1,000 employees) are the most affected group. Specifically:

250–999 employee companies that are unlisted and do not meet two of the three new size criteria now fall outside mandatory CSRD scope.
Listed SMEs that were scheduled for Phase 3 (FY2026) may see extended transitional relief.

If your company is in this group, your reporting obligation changes from mandatory to voluntary — but "voluntary" does not mean "unnecessary." More on this below.

The CSDDD / CS3D Connection

The Omnibus Directive does not only affect CSRD. It also revises the Corporate Sustainability Due Diligence Directive (CSDDD, also known as CS3D), which imposes mandatory human rights and environmental due diligence obligations across the value chain.

Key changes to CSDDD under the Omnibus package:

Scope alignment: the CSDDD employee and turnover thresholds are harmonised with the revised CSRD thresholds.
Due diligence scope: companies in scope must identify, prevent, and mitigate adverse impacts across their own operations and direct business relationships.
Reporting overlap: ESRS S2 (Workers in the Value Chain) disclosure requirements directly support CS3D compliance evidence — the DMA you conduct under ESRS informs your due diligence risk assessment.

If your company has 1,000+ employees and significant supply-chain exposure, your CSRD and CSDDD obligations are now tightly coupled. Emistra's ESRS S2 module supports the documentation needed for both frameworks.

What If You Drop Below the New Threshold?

If the Omnibus revision takes your company out of mandatory scope, you face a strategic choice — not a compliance holiday. Here is why:

1. Supply-Chain Pressure Persists

Large companies still in CSRD scope must report on their value chain under ESRS SBM-3 and S2. That means they will ask suppliers — including companies with 250–999 employees — to provide sustainability data. Your customers' compliance requirements do not disappear because your own regulatory obligation changes.

2. VSME: The Voluntary Standard

The EU has published the Voluntary Sustainability Reporting Standard for non-listed SMEs (VSME), designed as a proportionate alternative to the full ESRS. It covers a simplified set of disclosures — basic environmental metrics, workforce data, and governance information — that align with what large-company value chain partners typically request.

Reporting under VSME positions your company as a credible supplier, investor target, and banking counterpart without the full burden of 12 ESRS topical standards.

3. Investor and Lender Expectations

ESG ratings agencies, banks running EU Taxonomy-aligned green loan assessments, and institutional investors increasingly expect sustainability disclosure regardless of regulatory mandate. Companies that stop reporting altogether after falling out of CSRD scope may find it harder to access sustainable finance products.

Revised Timeline Summary

Phase	Reports on FY	Who	Key Change Under Omnibus
1	2024	PIEs with 500+ employees	No change — already reporting
2	2025	Large undertakings (new: 1,000+ employees)	Threshold raised from 250 → 1,000
3	2026	Listed SMEs	Extended transitional opt-out available
4	2028	Non-EU companies (€150M+ EU revenue)	No change

For a full breakdown of each phase, see our CSRD Deadlines 2025–2028 guide.

What You Should Do Now

If You Are Still In Scope

Your obligations are unchanged — or tightened. With the 2026 Omnibus revision finalised, there is no further threshold relief expected. Focus on:

Completing your Double Materiality Assessment using a structured, ESRS-aligned approach. Our step-by-step DMA guide walks through the full process. Use our free DMA tool to get a preliminary materiality map.
Building audit-ready data infrastructure — limited assurance is already required, and reasonable assurance is targeted from FY2028 under the Omnibus revision timetable. See our ESRS implementation guide for the full preparation workflow.
Integrating CSDDD due diligence into your ESRS S2 workflows, since the directives are now explicitly linked.

If You Are Newly Out of Scope

Do not dismantle your sustainability reporting infrastructure. Instead:

Assess VSME alignment — map what you have already built against the simplified VSME disclosure set.
Respond to value-chain data requests — your large-company customers will still need Scope 3 data from you.
Use your CSRD preparation as competitive advantage — companies that continued voluntary reporting under VSME are more attractive to investors, lenders, and procurement teams.
Check your CSRD readiness baseline using our free CSRD Readiness Checker to understand where you stand across the six key compliance pillars.

Implications for DMA and Gap Analysis

Whether you are in or out of mandatory scope, a Double Materiality Assessment remains best practice. Under the Omnibus revision:

In-scope companies must conduct a full DMA per ESRS 1 §§38–63, with IRO identification, stakeholder engagement, and board approval.
Voluntarily reporting companies benefit from a simplified materiality screen to identify which VSME disclosures are relevant to their operations and value chain.

Either way, understanding your material topics is the foundation of credible sustainability reporting — and the starting point for any meaningful gap analysis.

Emistra supports 11 frameworks natively — ESRS, GRI, TCFD, ISSB, CDP, EU Taxonomy, SASB, SEC Climate Rule, California SB 253, SEBI BRSR, and GHG Protocol — across 23 report templates with iXBRL/ESEF export, full audit trails, and a dedicated auditor portal. Whether your company remains in CSRD scope or transitions to voluntary VSME reporting, the underlying data infrastructure is the same. Get started →