The last week of February 2026 saw a surge in important regulatory developments in the sustainability reporting and disclosure rules across key global markets. This blog provides an update on the key schemes, in case you missed it.
EU: CSRD and CSDDD Omnibus 1 amendment formally completed
Following almost exactly one year of consideration, the Omnibus 1 Directive amending CSRD and CSDDD was published in the EU Official Journal on 26 February, following its adoption by the European Parliament in December 2025 and the Council on 24 February. The Omnibus changes are aimed at addressing concerns over the breadth and complexity of the original CSRD and CSDDD obligations, and reducing significantly the number of entities required to comply (see our previous blog post for more details, noting that the version published in the Official Journal makes no meaningful changes to the version it discusses).
The new form of CSRD and CSDDD rules will have effect from 18 March 2026.
On CSRD, Member States will be required to transpose the changes by 19 March 2027 (and you can follow their progress on our interactive CSRD & Omnibus Implementation Tracker). As a reminder, the CSRD reporting obligations for:
EU PIEs and Issuers of EU securities will still technically apply for financial years starting in 2024, 2025 and 2026 where they exceed the original Wave 1 thresholds (500 employees; and either €50m net turnover or €25m balance sheet), but Omnibus 1 allows Member States to exempt PIEs and Issuers below the new Omnibus thresholds (1,000 employees and €450m turnover) immediately. We expect most Member States will enact that exemption (the exemption is already in force in Denmark and Austria, and well progressed in Poland).
Large EU companies and groups will apply from financial years starting in 2027, where they have more than 1,000 employees and €450m turnover. Financial holding companies whose subsidiaries “business models and operations are independent of one another” will now be exempt from this requirement.
EU subsidiaries with over €200m in turnover (or if not, EU branches over that threshold) of company groups with a non-EU ultimate parent, will apply from financial years starting in 2028, where the global group generates more than €450m turnover in the EU (with the exemption above also applying where the non-EU parent is an eligible financial holding company).
On CSDDD, Member States will be required to transpose the changes by 26 July 2028. The substantive obligations will apply from 26 July 2029, and reporting obligations for financial years starting in 2030, in each case to:
EU companies or ultimate parents of corporate groups who exceed a worldwide turnover of €1.5bn and 5,000 employees
Non-EU companies or ultimate parents of corporate groups which exceed a turnover of €1.5bn in the EU.
There are also changes that raise the thresholds defining which franchise businesses must comply.
Revision of the CSRD reporting standards
The Omnibus 1 streamlining package also formalises a commitment to revise the European Sustainability Reporting Standards (ESRS), which apply to EU PIE and Issuer reporting from FY2024 and large EU company reporting from FY2027. This revision process has continued in parallel with Omnibus 1. EFRAG submitted an updated draft to the Commission as “technical advice” in December 2025 and, as required by CSRD, a number of other regulatory bodies have given their opinion on that draft. This includes the European Central Bank and the European Supervisory Authorities or ESAs (see the respective opinions of ESMA, EBA and EIOPA).
The Omnibus 1 Directive recitals note that the revised version should take effect (through a delegated act) within six months of the Directive’s entry into force (so, 18 September 2026) at the latest. We expect the Commission to open a 4-week public consultation on the final draft ESRS shortly. The EU Parliament and Council will have to approve the final ESRS before they can enter into force.
Meanwhile progress has also been made on the narrower Non-European Sustainability Reporting Standards (NESRS), which will apply to non-EU headed group reporting from FY2028. CSRD provides for the NESRS to focus on impact-materiality reporting only (except for climate reporting, which will be double materiality). EFRAG published a research draft reflecting those principles on 26 February 2025 (see here), but the project was paused pending finalisation of the simplified ESRS framework, above. Although the NESRS do not need to be adopted before 1 October 2027 (here), we understand that EFRAG work on these standards could resume shortly.
UK Sustainability Reporting Standards
These standards are based closely on the ISSB baseline frameworks, with S1 providing a general framework for applying the UK SRS, and setting the scope of reporting on general sustainability-related risks and opportunities and S2 setting the scope of reporting on climate-related risks and opportunities.
The UK SRS do not impose direct reporting obligations, but will be given effect through separate regulations. As we have reported recently, the FCA launched a consultation on 30 January 2026, proposing a new Listing Rule that would replace the existing TCFD reporting obligations on UK-listed companies, with a requirement to report against the UK SRS S2 (save for Scope 3), from financial years starting in 2027. Reporting on Scope 3 emissions and under S1 is proposed to follow (in 2028 and 2029 respectively).
The UK Government’s response to the UK SRS consultation published on 25 February also confirms an intention to replace the TCFD-aligned disclosure obligations in the UK Companies Act with UK SRS-based requirements. A consultation is planned for later in 2026.
California climate reporting
The California Air Resources Board (CARB) voted on 26 February to finalise its regulations, as proposed, for the state’s landmark climate disclosure laws, SB 253 and SB 261, covering applicability, deadlines, and fees. With these rules finalised, companies finally can confirm which entities are in scope for reporting.
CARB will now prepare a rulemaking package, including responses to public comment, and submit it to the California Office of Administrative Law (OAL), which will review for compliance with the California Administrative Procedure Act (APA) and regulations.
The CARB Board also directed staff to coordinate with the California Department of Insurance to consider and propose rules to bring insurers within the scope of SB 253. CARB will also undertake a subsequent rulemaking covering Scope 1, 2 and expanded GHG emissions reporting from 2027, and on data assurance requirements.
In terms of the ongoing legal challenge:
SB 261 (Climate Risk): The U.S. Court of Appeals for the Ninth Circuit has temporarily enjoined enforcement of SB 261 while it considers the U.S. Chamber of Commerce’s motion for a preliminary injunction against both SB 261 and SB 253. Arguments took place on 9 January 2026, but no decision has been issued. Filing remains voluntary for now.
SB 253 (GHG Emissions): This law is currently not enjoined. Companies should continue preparing for the initial reporting deadline (now set as 10 August 2026) while following the litigation.
It should also be noted that CARB previously announced 2026 regulatory relief to ease the transition, including relief from assurance requirements (FAQ 20), and a "non-reporting" option for companies that were not already collecting or planning to collect greenhouse gas emissions data as of 5 December 2024, provided they submit a statement on company letterhead confirming this (FAQ 19).
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