Redefining Sustainability Reporting in the EU: Insights from the CSRD, ESRS, and the EU Omnibus Simplification Package

The regulatory framework of reporting in Europe is becoming increasingly complex, where the main goal of reporting is to strengthen transparency in the publication of information related to environmental, social and governance (ESG) issues, the so-called corporate sustainability reporting. This paper analyzes the latest changes in the EU sustainability reporting system, with a particular focus on how the proposed simplification legislative changes reshape the Corporate Sustainability Reporting Directive (CSRD) and the implementation of the European Sustainability Reporting Standards (ESRS). The omnibus simplification package is introduced with the aim of simplifying the reporting procedures, extending the implementation deadlines and with the focus of mandatory reporting primarily on larger companies. The proposed simplifications are still in line with the longterm environmental and social goals of the European Union, while at the same time introducing fewer administrative requirements, which still does not affect the transparency of reporting. The main challenge that arises is how to find a balance between regulatory ambitions and the real possibilities of companies to implement them in business practice. Therefore, the main objective of this paper was to show how the proposed regulatory changes affect the future development of sustainability reporting systems at the European level.