ESG Reporting: Who's Covered After the EU's Omnibus I Simplification?

Note: This article describes EU and Danish regulatory developments specifically, as they apply to Danish businesses.

ESG stands for Environment, Social and Governance, and is the internationally used umbrella term for how a business documents its responsibility work. The rules in this area changed significantly in 2026, and this article goes in depth on what ESG reporting actually is, who's genuinely covered today, and why it's still relevant for the vast majority of small and medium-sized businesses — including those not legally obligated. If you want to start documenting your own data, you can download our free ESG template (currently in Danish), built on the basis of this very article.

What is ESG reporting?

ESG reporting is the systematic documentation of a business's data and efforts within three main areas:

• Environment: Energy consumption, CO₂ emissions, pollution, biodiversity, water consumption and waste management.
• Social: Employee composition, health and safety, pay and compensation, education and human rights.
• Governance: Anti-corruption, business ethics, supply chain management and corporate governance.

Reporting can either be mandatory — as part of European sustainability reporting (CSRD) — or voluntary, where a business chooses itself to document and communicate its data, often because customers or partners ask for it.

The big news: the EU's Omnibus I simplification

On February 24, 2026, the EU's Council of Ministers adopted the final Omnibus I package, simplifying the rules for both sustainability reporting (CSRD) and corporate due diligence obligations (CSDDD). The package was published in the EU Official Journal on February 26, 2026 as Directive (EU) 2026/470 and entered into force on March 18, 2026. Denmark has 12 months from entry into force to implement the changes into Danish law, and the Danish Business Authority sent draft executive orders out for consultation in January 2026, intended to exempt businesses falling outside the new, narrowed scope from the sustainability reporting requirement for the 2025 and 2026 financial years.

Who's covered by mandatory CSRD reporting now?

After Omnibus I, only businesses meeting both of the following conditions simultaneously are covered by mandatory reporting:

• More than 1,000 employees, and
• Net revenue of over EUR 450 million.

This is a significant narrowing compared to the original CSRD thresholds, and it means the vast majority of businesses that would otherwise have become covered in the coming years now fall outside the mandatory reporting — at least for now.

What does it mean for your business if you're no longer covered?

If your business was previously expected to become covered by CSRD in one of the upcoming reporting waves, but now falls outside the new thresholds, you get reporting relief: you don't need to report for the 2025 and 2026 financial years, even if you'd previously prepared for it.

"Shielded undertakings" — your protection as a smaller supplier

One of the most practically relevant innovations in Omnibus I for smaller businesses is the concept of a "shielded undertaking". If your business is under the 1,000-employee threshold, you can generally decline to provide more ESG information to a larger customer or partner than what's set out in the EU's new, voluntary reporting standard for smaller businesses — the so-called VSME standard (Voluntary Sustainability reporting standard for SMEs). The Commission was expected to have the final VSME standard ready by mid-2026.

In practice, this means that even if you're not legally obligated yourself, you may find larger customers in your value chain asking for ESG data from you — but now with an upper limit on how much they can require.

Why is an ESG template still relevant if you're not legally covered?

Precisely because more and more larger businesses are themselves covered by CSRD or work with ESG in a structured way voluntarily, they increasingly pass requirements and inquiries on to their suppliers and partners — regardless of whether the supplier is legally obligated. If you have a structured ESG template ready, you can answer such inquiries quickly and professionally, without having to invent a format from scratch each time — and without disclosing more information than you're required to as a shielded undertaking.

A structured ESG data foundation can also be relevant if your business is one day sold: a buyer who works with ESG in their own business or their own value chain will often see it as a positive sign that goals and data are already documented and easily accessible.

ESG template, responsibility policy and responsibility check — what's the difference?

The three documents complement each other but cover different purposes:

• The ESG template is a data documentation form — concrete figures and facts about your environmental, social and governance matters.
• The responsibility policy describes your overall stance, goals and principles.
• The responsibility check is a self-assessment of how well you actually live up to your own policy in practice.

Many businesses benefit most from using all three together: the policy describes what you want to do, the check shows whether you're doing it, and the ESG template documents the concrete data behind both.

Frequently asked questions

Does my business need to ESG report?

Only if you meet both statutory thresholds under Omnibus I: more than 1,000 employees and net revenue over EUR 450 million. Otherwise it's voluntary, but increasingly requested in practice.

Can a customer require me to provide ESG data even if I'm not legally covered?

Yes, but if you're under 1,000 employees, you're a "shielded undertaking" and can generally decline to provide more than what's set out in the EU's voluntary VSME standard.

Is the ESG template the same as mandatory sustainability reporting?

No. The template is a voluntary, structured documentation form. If your business is covered by CSRD, the mandatory reporting must be prepared according to the formal European reporting standards (ESRS), typically with assistance from an accountant or specialized advisor.

Want to start documenting your ESG data yourself? Download our free ESG template as PDF or Word (currently in Danish), or book a no-obligation call if you're unsure what applies to your specific business.