CSRD rollback: what the omnibus package means for the fashion industry
The European Commission’s latest proposal is shaking up ESG reporting. The newly announced omnibus package significantly reduces reporting requirements, delaying CSRD implementation by two years and cutting 80% of companies from the mandatory reporting scope. This means that only the largest companies—those with more than 1,000 employees and either €50M in turnover or €25M in profit—will still be required to comply.
But here’s the catch: this is still a proposal, and the EU aims to fast-track its approval from an initial three months to just four weeks. This means businesses are left in limbo, wondering whether to pause or push forward.
The European Commission’s latest proposal is shaking up ESG reporting. The newly announced omnibus package significantly reduces reporting requirements, delaying CSRD implementation by two years and cutting 80% of companies from the mandatory reporting scope. This means that only the largest companies—those with more than 1,000 employees and either €50M in turnover or €25M in profit—will still be required to comply.
But here’s the catch: this is still a proposal, and the EU aims to fast-track its approval from an initial three months to just four weeks. This means businesses are left in limbo, wondering whether to pause or push forward.
What’s in the proposal?
The omnibus package aims to simplify EU regulations to boost competitiveness and investment capacity. The key changes in sustainability reporting include:
Who still needs to report in 2026?
A key question now is: what happens to companies that already meet the 1,000-employee and €50M profit threshold? Are they getting an extension, or will they still need to report on FY 2025?
Under the current proposal, these companies would also see their reporting delayed by two years, meaning they would now start reporting in 2028 over FY 2027 instead of 2026 over FY 2025. However, this is not yet final, and the speed of the decision-making process makes it uncertain whether further revisions will follow.
The omnibus package aims to simplify EU regulations to boost competitiveness and investment capacity. The key changes in sustainability reporting include:
- 80% of companies removed from CSRD’s mandatory reporting scope
- Reporting requirements delayed by two years for large non-listed companies and SMEs
- EU taxonomy reporting made voluntary for companies under €450M turnover
- Simplified ESG reporting standards with fewer data points and a stronger focus on materiality
- Only companies with over 1,000 employees and either €50M in turnover or €25M in profit remain in scope
Who still needs to report in 2026?
A key question now is: what happens to companies that already meet the 1,000-employee and €50M profit threshold? Are they getting an extension, or will they still need to report on FY 2025?
Under the current proposal, these companies would also see their reporting delayed by two years, meaning they would now start reporting in 2028 over FY 2027 instead of 2026 over FY 2025. However, this is not yet final, and the speed of the decision-making process makes it uncertain whether further revisions will follow.
Meanwhile, what should fashion businesses do?
Many companies have already invested in their double materiality assessments (DMA) and mapped out their next steps for CSRD compliance.
So, should they pause?
Absolutely not.
Regardless of regulatory shifts, fashion brands that take ESG seriously are already seeing the benefits:
1. Strong ESG = risk mitigation
Fashion brands rely on global supply chains, raw materials, and complex logistics. Ignoring ESG means exposing the business to supply shortages, price volatility, and reputational damage.
Companies like Auping, with its circular mattress model, avoided supply chain crises during COVID-19. Bol.com successfully built a profitable refurbished electronics model. Fashion brands that integrate circular business models now future-proof their operations.
2. The competition isn’t slowing down
Leading fashion brands like Patagonia, Mud Jeans, and Eileen Fisher aren’t waiting for CSRD—they’re doubling down on sustainability because they know it’s smart business.
Consumers, investors, and partners still expect transparency. Even if reporting obligations shrink, brands that fail to act will fall behind those already embedding ESG into their core business.
3. Reputation, talent, and long-term growth
Fashion is highly reputation-driven. The next generation of consumers and employees expects real commitment to sustainability—not because the law requires it, but because it’s the right thing to do.
Businesses that see ESG as an opportunity rather than a compliance burden are the ones building a legacy that will still be relevant 10, 20, or 30 years from now.
Our advice: keep going, see the advantage!
If your business is already working on CSRD, double materiality, and ESG integration—stay on track.
This is not just a regulatory shift; it’s a moment to redefine leadership in fashion. Those who use this time to strengthen their sustainability strategy will gain a massive competitive edge. Stronger brand reputation, supply chain resilience, top talent attraction, and business innovation all come from embracing ESG—not because of legal obligations, but because it creates real value.
At RethinkRebels, we see a clear shift: regardless of CSRD obligations, brands are choosing to integrate ESG into their business models because they see the long-term advantage.
So, the question is: where does your brand stand?
Contact us today or visit our website to explore how we can help your brand navigate CSRD changes and lead the way in responsible fashion.
Many companies have already invested in their double materiality assessments (DMA) and mapped out their next steps for CSRD compliance.
So, should they pause?
Absolutely not.
Regardless of regulatory shifts, fashion brands that take ESG seriously are already seeing the benefits:
1. Strong ESG = risk mitigation
Fashion brands rely on global supply chains, raw materials, and complex logistics. Ignoring ESG means exposing the business to supply shortages, price volatility, and reputational damage.
Companies like Auping, with its circular mattress model, avoided supply chain crises during COVID-19. Bol.com successfully built a profitable refurbished electronics model. Fashion brands that integrate circular business models now future-proof their operations.
2. The competition isn’t slowing down
Leading fashion brands like Patagonia, Mud Jeans, and Eileen Fisher aren’t waiting for CSRD—they’re doubling down on sustainability because they know it’s smart business.
Consumers, investors, and partners still expect transparency. Even if reporting obligations shrink, brands that fail to act will fall behind those already embedding ESG into their core business.
3. Reputation, talent, and long-term growth
Fashion is highly reputation-driven. The next generation of consumers and employees expects real commitment to sustainability—not because the law requires it, but because it’s the right thing to do.
Businesses that see ESG as an opportunity rather than a compliance burden are the ones building a legacy that will still be relevant 10, 20, or 30 years from now.
Our advice: keep going, see the advantage!
If your business is already working on CSRD, double materiality, and ESG integration—stay on track.
This is not just a regulatory shift; it’s a moment to redefine leadership in fashion. Those who use this time to strengthen their sustainability strategy will gain a massive competitive edge. Stronger brand reputation, supply chain resilience, top talent attraction, and business innovation all come from embracing ESG—not because of legal obligations, but because it creates real value.
At RethinkRebels, we see a clear shift: regardless of CSRD obligations, brands are choosing to integrate ESG into their business models because they see the long-term advantage.
So, the question is: where does your brand stand?
Contact us today or visit our website to explore how we can help your brand navigate CSRD changes and lead the way in responsible fashion.
Author
Rachel Cannegieter
Sustainability & Circularity Board Advisor | Fashion & ESG Expert | Founder, Circular Impact Consultancy RethinkRebels | CSRD | GRI | B Corp Leader | Driving sustainable leadership, strategic impact & lasting change.