Why Omnibus is not a setback but an opportunity

The recently proposed changes to the Corporate Sustainability Reporting Directive (CSRD) within the European Commission’s Omnibus Package have sparked both concern and applause. While extending the timeline for reporting to 2028 has been criticised by some for slowing Europe’s sustainability efforts, we at Circle Economy Consulting believe sustainability and ESG professionals should consider this an opportunity. Rather than rushing through a reporting sprint, they can refocus on developing more impactful, strategic approaches to circular economy performance and reporting. At the same time, new challenges arise around data collection and linking the circular economy to climate change mitigation.

First, let’s quickly recap the main changes brought about by the Omnibus package.

80% of companies will no longer be subject to the CSRD, limiting reporting obligations to large businesses with over 1000 employees.
The reporting obligations for companies under the scope of the CSRD will not apply to smaller companies in their supply chains.
The CSRD reporting deadlines will be postponed by two years (until 2028) for companies initially required to report in 2026 or 2027.
EU Taxonomy reporting will be mandatory for the largest companies but voluntary for others.
The ‘Do No Significant Harm’ (DNSH) criteria for pollution prevention will be simplified.

The additional time allows companies to move beyond simple compliance and focus on embedding circularity into their business models in a more meaningful and effective way. Many businesses have struggled to raise awareness internally, align stakeholders, develop a strategy, select KPIs, and collect data required by the CSRD. The extended timeline offers companies the chance to:

Develop robust, long-term circular economy strategies alongside their reporting obligations, ensuring that reporting and implementation drive impact together.
Build solid data infrastructures that provide the foundation for reliable, consistent, and scalable data collection.
Collaborate more deeply with suppliers and customers, fostering meaningful partnerships to improve data quality and availability and implement more profound changes in the value chain.

However, the change in rules will complicate the already challenging data collection from suppliers, as SMEs are no longer obliged to provide information on circular economy performance. To address this, companies should prioritise innovative approaches such as integrating circularity criteria into procurement processes and leveraging sector averages or certification schemes when direct supplier data is unavailable.

We also recommend that sustainability and ESG specialists make the most out of the European Commission’s plan to introduce Sectoral Action Plans (as part of a broader Competitiveness Compass initiative) alongside sector-agnostic policies under the CSRD. Sector-specific guidance is well suited for the context-specific nature of circular economy solutions, enabling more effective and efficient strategies and reporting across industries. To unlock the full potential of these initiatives, it will be essential to include circular economy initiatives in the Sectoral Action Plans in order to achieve low-carbon competitive industries.

For sustainability and ESG specialists, these changes underscore the need for expert support in building the right capabilities whilst achieving tangible results. Circle Economy’s consulting team stands ready to assist companies in three key areas:

Setting you up for success by developing inspiring strategies and implementation of plans and roadmaps that will convey the importance of the circular transition to your senior management and other internal stakeholders.
Empowering you by developing the data infrastructure, baselines, KPIs and targets needed for efficient and effective monitoring and reporting.
Inspiring you by providing sector-specific insights and thought leadership to guide more effective decision-making and strategy development.

This is why we believe the extended timeline should not be seen as a delay in action but as an opportunity to lay the groundwork for long-term impact. By taking the time to build robust strategies and data systems now, companies can gain competitive advantages and face the reporting obligations in 2028 with a strong circular economy performance. We look forward to supporting businesses on this journey and helping them turn reporting requirements into opportunities for sustainable innovation and competitive advantage.