CSRD Omnibus Simplification: What Changed for SMEs

In February 2025, the European Commission published its "Omnibus" simplification package -- a set of proposals to reduce the regulatory burden on European businesses. The EU Council formally adopted Omnibus I on 24 February 2026, making these changes law. For UK SMEs who supply EU-reporting companies, this package changed several important things about when and how their customers will ask for sustainability data.

The headline interpretation was straightforward: CSRD has been scaled back, so SMEs can relax. That interpretation is wrong. What actually happened is more nuanced, and understanding the detail matters if you are a UK supplier planning your ESG data strategy.

What the Omnibus package actually changed

The Omnibus package -- originally published as COM(2025) 80 final and formally adopted by the EU Council in February 2026 -- made four significant amendments to the CSRD framework established by Directive 2022/2464:

1. Timeline delays for wave 2 and wave 3 companies

The original CSRD timeline required "large companies" (those meeting two of three size criteria: 250+ employees, EUR 50 million+ turnover, EUR 25 million+ balance sheet) to report for financial year 2025, with reports published in 2026.

The Omnibus package pushed this back. Companies with 250-999 employees that were newly brought into scope by CSRD received a two-year postponement. Listed SMEs, originally due to report from financial year 2026, were also delayed.

In practical terms, the wave 2 companies that were preparing to request supplier data in 2025-2026 now have until 2027-2028 to start reporting. That means some of the questionnaires you were expecting may arrive later than originally anticipated.

2. Raised employee thresholds

The Omnibus package raised the employee threshold for "large undertaking" status from 250 to 1,000 employees for the first wave of newly reporting companies. This immediately reduced the number of companies brought into direct CSRD scope.

For a detailed breakdown of the original and revised thresholds, see our CSRD thresholds guide.

3. Simplified reporting standards

The adopted package calls for a simplified version of the European Sustainability Reporting Standards (ESRS) for companies with fewer than 1,000 employees. The intent is fewer mandatory data points, more flexibility in materiality assessment, and reduced reporting complexity.

This matters for SME suppliers because simpler reports from your customer should, in theory, mean simpler questionnaires for you. If your customer does not need to disclose 200 data points on climate, they will not need to collect 200 data points from their supply chain.

4. VSME as the maximum ceiling for SME data requests

This is the most significant change for SME suppliers. The Omnibus package amended Article 29b of the Accounting Directive, establishing that large reporting companies cannot demand more sustainability data from SME suppliers than what the VSME (Voluntary SME) standard covers.

In other words, VSME went from being a voluntary guideline to a regulatory ceiling. If your customer reports under CSRD, the maximum they can legitimately ask from you as an SME supplier is bounded by the VSME framework -- its Basic Module and Comprehensive Module.

This does not mean every customer will immediately comply. Bespoke questionnaires and platforms like EcoVadis will take time to align. But the legal basis for pushing back on excessive data requests is now considerably stronger.

For a detailed walkthrough of the VSME modules and what each one covers, see our VSME standard guide.

What this means in practice for UK SME suppliers

The Omnibus changes do not eliminate supply chain data requests. They reshape the timeline and scope. Here is the practical impact:

Fewer requests in 2026, more in 2027-2028

The companies that were due to start reporting in 2026 and would have sent you questionnaires in late 2025 have largely been given extra time. But this is a delay, not a cancellation. Wave 1 companies -- those already reporting under the old NFRD -- are reporting now and requesting supplier data today. The wave 2 companies will follow, just on a later schedule.

If you are not receiving Scope 3 data requests yet, you likely will within 12-18 months. The window to prepare has widened, but it has not disappeared.

Data requests will become more standardised

The VSME ceiling means that questionnaire content should converge over time. Instead of every customer inventing their own 80-question survey, the trend will be toward VSME-aligned questionnaires covering a bounded set of data points. This is good news for SMEs: the same answers will be reusable across more customers.

The VSME Basic Module -- covering energy, emissions, workforce headcount, key policies, and H&S incidents -- will likely become the standard minimum that every supplier is expected to provide.

The "proportionality" argument has legal weight

Before the Omnibus package, if a customer sent you an unreasonably detailed 150-question ESG survey, your only option was to complain informally. Now there is a regulatory basis for proportionality. If you are an SME and your customer is asking for data beyond the VSME scope, you can point to the Omnibus amendment as justification for providing only what the VSME framework requires.

This will not resolve every dispute, and larger customers may still exert commercial pressure. But the direction of travel is clear: the EU wants to protect SMEs from disproportionate reporting demands.

UK SMEs are not directly covered, but benefit indirectly

The VSME ceiling applies to EU-reporting companies' requests. As a UK SME, you are not directly subject to any of these rules. However, when your EU-regulated customer designs their supplier questionnaire, they will design it within the VSME bounds because that is what their regulator expects. You benefit from the ceiling without being subject to it.

What UK SMEs should do now

The Omnibus package gives you more time. Use it well. Here is a practical action plan:

Use the delay to build your data infrastructure

The worst thing you can do with extra time is waste it. The data requests are coming -- they are just arriving 12-18 months later than originally expected. Use that window to:

Gather your energy consumption data for the past two to three years
Calculate baseline Scope 1 and 2 emissions using DEFRA conversion factors
Draft or update your key policies (environmental, anti-bribery, modern slavery, H&S)
Centralise your evidence documents (certificates, policies, audit reports)

Build your fact library around the VSME Basic Module

Since VSME is now the ceiling, structure your reusable data around its framework. The Basic Module comprises 11 disclosures (B1–B11). If you can answer all of them confidently, with evidence, you are prepared for the majority of questionnaires you will receive.

Key data points to have ready:

Total energy consumption (kWh) split by source
Scope 1 and 2 greenhouse gas emissions (tonnes CO2e)
Total workforce headcount and gender split
Health and safety incident data (RIDDOR-reportable incidents, fatalities)
Confirmation of key policies (environmental, H&S, anti-bribery, data protection)
Waste generated and diversion rates

Prepare the Comprehensive Module answers

The Comprehensive Module adds 9 further disclosures (C1–C9), including a description of your business model and strategy, GHG reduction targets and any transition plan, and climate risks. Several of these are qualitative answers rather than pure data points. Start drafting them now while you have time to think rather than react.

Track the regulatory timeline

The Omnibus I package was formally adopted by the EU Council on 24 February 2026. Keep an eye on EFRAG updates to VSME guidance, delegated acts filling in the detail, and any UK-specific sustainability reporting developments (including the UK SRS framework expected from 2026).

Common misconceptions about the Omnibus changes

"CSRD has been cancelled." It has not. The core obligation remains. The Omnibus package delayed timelines and simplified requirements. It did not repeal the directive.
"SMEs no longer need to worry about ESG data." The opposite is more accurate. The VSME ceiling clarifies what SMEs will be asked for, making preparation easier -- not unnecessary.
"The delays mean I have years before this affects me." Wave 1 companies are reporting now. If you supply any of the roughly 11,700 entities already under NFRD, you may already be receiving data requests.
"UK businesses are not affected because CSRD is an EU regulation." CSRD applies to your customer, not to you. But the questionnaire lands on your desk regardless of where you are incorporated.

How AnswerVault will help

AnswerVault will be structured around the VSME framework, so your fact library will align with the standard that now defines the ceiling for supplier data requests. As VSME-aligned questionnaires become the norm, your stored answers will be directly reusable -- matching the categories, terminology, and data points that customers are asking for.

The platform will also help you track which version of your data was sent to which customer, so when figures are updated annually, you maintain a clear audit trail.

Try AnswerVault free to get started.

Sources

Omnibus Simplification Package -- European Commission, COM(2025) 80 final, 26 February 2025. Proposal for a Directive amending Directives 2013/34/EU, 2004/109/EC, 2006/43/EC and Regulation (EU) No 537/2014 as regards the simplification of sustainability reporting requirements.
CSRD Directive -- Directive (EU) 2022/2464 of the European Parliament and of the Council, 14 December 2022. Official Journal of the European Union, L 322.
EFRAG VSME Standard -- EFRAG, Voluntary Sustainability Reporting Standard for non-listed SMEs (VSME), published 17 December 2024. Defines the Basic Module (11 disclosures) and Comprehensive Module (9 additional disclosures) referenced in the Omnibus ceiling provision.
Article 29b amendment -- Proposed amendment within COM(2025) 80 final establishing VSME as the maximum data request ceiling for reporting companies' SME suppliers.
ESRS Set 1 -- Commission Delegated Regulation (EU) 2023/2772, 31 July 2023. The topic standards that reporting companies use and that drive supplier data requests.

This article provides general guidance for UK SMEs tracking the CSRD Omnibus changes. It is not legal or regulatory advice. Specific application to your buyers' obligations and any supply-chain data ceiling should be checked against the latest published Omnibus text and EFRAG guidance, and material obligations reviewed with your legal or sustainability advisor — the European Commission's adopted text is the definitive reference.