CSRD Just Got Smaller. Do Not Relax Yet.

The EU Omnibus I Directive entered into force on 18 March 2026, and it cut CSRD down hard. Only companies with more than 1,000 employees and over 450 million euros in annual turnover now face mandatory reporting.

If you run a fashion SME, that is not you. But do not put your feet up.

What actually changed

Fashion companies that do meet the new threshold will first report in 2028, covering the 2027 financial year, a two year delay on the original timeline.

Listed SMEs, previously caught by a lighter regime, are removed from mandatory CSRD entirely and can instead choose the Voluntary SME Standard (VSME ESRS) if they want to report at all.

The reporting standards themselves got a haircut too: data points dropped from 1,073 to 320, a 70 percent cut, and sector specific standards became voluntary rather than mandatory.

Why SMEs should still pay attention

Here is the part that matters for most of my clients. You are almost certainly not directly in scope. But if you supply, manufacture for, or sell through a business that is, their reporting obligation does not disappear. It flows down.

A large retailer or brand still covered by CSRD has to report on its supply chain, including Scope 3 emissions and social data. That data has to come from somewhere, and that somewhere is you.

• If a customer above the new threshold has asked you for supply chain or emissions data before, expect that to continue

• The VSME standard gives smaller suppliers a lighter, voluntary way to answer those requests without building a full CSRD style report

• Getting ahead on your own carbon and social data now means you are not scrambling when a big customer's compliance deadline lands on your desk

What this means for you

Omnibus is genuine relief if you were bracing for mandatory CSRD as an SME. It is not a reason to shelve sustainability data collection altogether, especially if a chunk of your revenue comes from customers who are still in scope.

If you already have GHG Protocol aligned carbon data or a live B Corp assessment, you are most of the way to answering a VSME style request anyway.

If you do not, this is a good, lower pressure moment to start, before it is a customer deadline rather than a choice.

Want a plain English read on whether Omnibus changes anything for your business specifically? Email or DM me.

Sources

Sedex, "EU Omnibus I Explained: Key CSDDD and CSRD Changes Businesses Need to Know (2026)." Coolset, "CSRD under Omnibus: updated scope, timelines, and what companies should do in 2026." Carbonfact, "What the EU Omnibus I Simplification Package Means for Apparel and Footwear Brands."