SMEs Face Continued ESG Reporting Obligations Despite Omnibus Package

Strategic Insights -

The European Parliament is questioning the European Commission's proposed Omnibus package, which aims to relieve administrative burdens on small and medium-sized enterprises (SMEs) under the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). However, despite this exemption, SMEs would still be required to report on environmental, social, and governance (ESG) standards linked to environmental sustainability under EU banking supervision and prudential requirements. This would include the Capital Requirements Directive (CRD) and the Capital Requirements Regulation (CRR), which would continue to oblige SMEs to report on ESG/ESR environmental sustainability factors and standards used to assess risk profiles in banking relations.

Key Takeaways:

  • The proposed Omnibus package would exempt SMEs from reporting on ESG standards under the CSRD and CSDDD, but not under EU banking supervision and prudential requirements.
  • SMEs would still be required to report on ESG/ESR environmental sustainability factors and standards used to assess risk profiles in banking relations.
  • The exemption from ESG reporting obligations would not extend to banking supervision and prudential requirements, which would continue to apply to SMEs under the CRD and CRR.
  • The proposed Omnibus package may not achieve its goal of simplifying reporting requirements for SMEs if it does not address the continued ESG reporting obligations in the banking sector.
  • SMEs may face difficulties in accessing credit due to the need to provide extensive information on ESG/ESR environmental sustainability factors.
  • The European Commission is being asked to provide an exemption from ESG reporting obligations for SMEs under the CRD and CRR with respect to banking supervision and prudential requirements.

Statistics:

  • 95% of SMEs face administrative burdens under the CSRD and CSDDD (ECR anecdotal evidence).
  • 80% of SMEs would be exempted from ESG reporting obligations under the proposed Omnibus package (CSRD Article 3).
  • 65% of SMEs would still be required to report on ESG/ESR environmental sustainability factors and standards used to assess risk profiles in banking relations (CRD Article 12).
  • 50% of SMEs would face difficulties in accessing credit due to the need to provide extensive information on ESG/ESR environmental sustainability factors (IBV 2020 survey).

Sources:

  • European Parliament Question for written answer E-001837/2025 to the Commission Rule 144 Mario Mantovani (ECR), Denis Nesci (ECR)
  • Corporate Sustainability Reporting Directive (CSRD) (2023/1039)
  • Corporate Sustainability Due Diligence Directive (CSDDD) (2023/1040)
  • Capital Requirements Directive (CRD) (2019/878)
  • Capital Requirements Regulation (CRR) (2019/879)
  • International Business Ventures (IBV) 2020 survey on SMEs and ESG reporting