The EU Omnibus package has arrived, and while the dust is yet to settle, it’s still a significant milestone on the road to impact-driven regulation. Yes, there have been eye-watering simplifications, and plenty of political turbulence – but let’s not lose sight of what really matters: we still have a robust, impact-aligned regulatory framework covering one of the world’s largest economic zones. And, crucially, the core metrics that businesses must report against (i.e. actual data, not subjective opinions and narratives) remain untouched.

This matters not just for Europe but for the world. We’re seeing similar impact-aligned standards emerging globally, such as China’s new reporting rules for listed businesses across three major exchanges set during the so called ‘Year of Disclosure’ 2024. The fact that the EU has retained a double materiality standard despite significant right-wing opposition signals a long-term (albeit diluted) commitment to sustainability-driven accountability despite massive headwinds.

Beyond compliance though, why does double materiality matter to business? Double materiality gives business a comprehensive view of their impacts, and the opportunities and risks they face. Focusing exclusively on financial materiality – an approach still advocated by ISSB – has driven us all past planetary boundaries already. As the effects of climate change and biodiversity loss become ever more tangible, businesses without a comprehensive transition plan built on the double materiality principle will fall behind.

From 50,000 to 5,000. Or is it? 

90% fewer businesses are now required to report under CSRD, shifting the scope from 50,000 to a pool of just 5,000. But in reality, that number significantly underestimates the number of companies impacted by the reported requirements. Why? Because supply chains don’t operate in isolation. Large enterprises subject to ESRS will inevitably ask their suppliers for aligned data, and those suppliers will turn to their own suppliers, and so on. The Omnibus’ so called ‘value chain cap’ should prove porous.

This is where the voluntary SME (VSME) standard becomes critical. While smaller firms might not be directly required to report under ESRS, they will face increasing pressure from B2B partners seeking to streamline their own reporting obligations. Simply put, if you’re in the EU economy, and even beyond, the chances are that ESRS compliance will touch you in some form sooner rather than later.

Cutting 80%+ costs through tech, not shortcuts

The first wave of CSRD preparations was a collective learning experience. Businesses have voiced consistent concerns over consulting costs, the subjectivity of double materiality assessments, and the lack of strategic value beyond simple compliance. On top of that, fear-mongering around ‘audit requirements’ led many businesses to overspend in an attempt to mitigate perceived risks. The Draghi report highlighted these ‘major’ compliance costs ranging from €150k to €1m+, all resulting from a highly manual approach to compliance. 

But here’s the good news: we’re now seeing a shift towards data and AI-led approaches that target slashing reporting costs by over 80%+. 

Here’s the even better news: GIST Impact’s data for DMA and IRO analysis is now available to thousands of companies through our partnerships. Through our integration with ESG platforms like Benchmark Gensuite, and consultancies like KPMG and Baringa, we’re able to provide a more structured and streamlined reporting process – offering a far more sustainable (and sensible) cost framework than pure consultancy-led approaches. 

The Omnibus package should serve as a wake-up call: embracing digitisation in 2025 isn’t just a nice to have, it’s essential for making sustainability reporting efficient, affordable, and scalable.

From compliance to value creation

Early CSRD adopters set high ambitions to target ‘value creation, not just compliance’ – but in practice, most businesses were just trying to keep their heads above water and make sense of it all. Now, as we enter the ‘post-Omnibus’ exhale, Boards and company leadership will naturally start asking tougher questions: How does all this reporting benefit us? Where is the return on investment?

The answer lies in shifting the mindset from box-ticking to business intelligence. The data collected for CSRD reporting isn’t just for compliance; it can drive genuine business value by:

• Strategic opportunity identification
• Meeting cost reduction targets
• Creating tangible risk mitigation plans

The businesses that move beyond regulatory obligation and start leveraging CSRD data for decision-making will be the ones that truly unlock its potential.

Watch out! Objective and traceable data, not AI-driven perceptions 

For CSRD to be a successful compliance exercise, let alone a value creation opportunity, companies must be able to trust their underlying data to be objective, accurate, and traceable. 

Clients and partners choose GIST Impact because our data is traceable to source and our methodologies are tried and tested.  

But companies must also watch out. Not all ‘data’ is born equal. We are seeing black-box AI tools that summarise perceptions from a wide range of sources and translate as ‘data’. The fall-out will be CSRD reporting that’s cheap, but not trusted, and so undermine value creation in the long-term.

A business-wide transformation, not just a reporting exercise

The Omnibus package has left extensive reporting requirements in place, meaning that CSRD isn’t just an isolated sustainability or finance function project – it still requires a full-scale business transformation. And as with any transformation effort, success depends on agility, collaboration, and strong leadership buy-in.

The most forward-thinking businesses are treating CSRD as a company-wide initiative, ensuring that data collection, analysis, and reporting drive real strategic outcomes rather than just compliance checklists. Whether it’s sustainability or finance teams leading the charge, the key is to approach it as a dynamic, cross-functional process.

The road ahead

So, is the Omnibus package a bust? That really depends on how businesses choose to respond. Our view is that the foundations for impact-driven reporting remain strong, the number of businesses affected will be far greater than estimated, and digitisation is finally offering a path to lower costs, quicker output, and higher value.

The EU has set the direction of travel. Now, it’s up to businesses to decide whether they’re merely along for the ride – or ready to take the wheel towards real impact.