Authors:
Point B: Holly Bridwell, Minahil Choudry, Katie Secrist
Pet Sustainability Coalition: Hannah Hintz
If your pet business sells, manufactures, or distributes products in Europe, recent changes to EU reporting regulations directly affect you. Whether you’re a brand, retailer, supplier, or distributor, understanding the evolving directives is essential for maintaining market access, meeting customer expectations, avoiding penalties, and staying ahead of sustainability trends.
The EU Corporate Sustainability Reporting Directive (CSRD) was adopted in December 2022 to support clarity and consistency in corporate sustainability reporting. Several headwinds contributed to the creation of the CSRD, including the EU Green Deal commitments and EU Taxonomy regulations, criticism of the vagueness of the Non-Financial Reporting Directive (NFRD), and rising international and investor pressure to enhance corporate transparency.
In March 2025, the Omnibus Simplification Package introduced proposed changes that may drastically scale back the reach and rigor of these key EU climate regulations such as CSRD and the Corporate Sustainability Due Diligence Directive (CSDDD), particularly for small to medium enterprises (SMEs). Despite these changes, the momentum has already been set in motion and will continue, particularly for those in the US who meet the California Senate Bill 253 and 261 thresholds and those who operate in countries such as the UK, Canada, and Japan who are adopting IFRS standards (International Financial Reporting Standards). The proposed delay provides a chance to calculate a more strategic approach to compliance that prioritizes business outcomes rather than being reactive.
What is changing?
1. Extended Timeline
Eight out of ten companies who were preparing for CSRD in 2025 will no longer meet the size threshold under the Omnibus package, many of them small to medium enterprises (SMEs). Of the companies who continue to meet the size threshold, many will likely be granted two more years to comply. CSDDD has been delayed until 2028.
| Regulation | Threshold | Timeline |
| CSRD | €50+ million in net turnoverand 1,000+ employees
OR €25+ million in assets. Non-EU Companies: EU net turnover threshold for parent companies +€450M; Large subsidiaries/branches in EU with €50M+ turnover Small- to medium- enterprises (SMEs) exempt |
2025 – 2029 delayed by two years, depending on company size |
| CSDDD | EU companies with + 1,000 employees & + €450M in global revenue Non-EU companies with + €450M in revenue from their activity in Europe | 2028 – 2029 delayed one year until 2028, with only two waves instead of three |
2. Reduced Scope
For CSRD, sector-specific standards will be removed, meaning no tailored reporting rules for industries. While the double materiality assessment requirement remains, the removal of sector-specific standards would lighten the burden for companies to address their most material impacts in a meaningful way within their sector. For CSDDD, the proposed changes drastically reduce the due diligence scope across a company’s value chain. SMEs will benefit the most from the proposed Omnibus package as it reduces the reporting burden for SMEs under the assumption that many of them will still be requested to report up to their customers as a Tier 1 supplier.
| Regulation | Updated Scope |
| CSRD | Sector-specific standards removedCap on data obtainment from suppliers (lessens traceability requirements) |
| CSDDD |
Limits due diligence obligations to only Tier 1 business partners Limits stakeholder engagement to just workers, their representatives, and communities that could be affected Frequency of assessments reduced to every five years instead of yearly |
3.Decentralized Civil Liability Standards
In the case of CSDDD, the penalty for non-compliance shall fall to each member state rather than governed at the EU level harmoniously across all. These decisions will be made during transposition and may result in higher or lower liabilities depending on the EU footprint of your company. CSDDD also reduced supplier non-compliance obligations to suspension as a last resort action rather than termination of the business relationship.
Despite these changes, it is expected that companies will refine their scope and preparation strategies, but are encouraged to maintain their sustainability momentum.Canada and the UK are continuing their adoption of IFRS S1 and S2 which constitute some of the most stringent requirements of all active regulations today. California Senate Bills 253 and 261 continue to drive maturity on GHG emissions reporting and climate-related risk disclosure for a wide array of companies but with less rigorous disclosure standards.
Where should we focus now?
The reduced scope and extended timeline of the Omnibus proposal creates an opportunity for your business to sharpen focus on voluntary reporting and preparation for regulation based alignment, ensuring these efforts are in line with your business strategy and impact plans. The intent of Omnibus is to simplify the European Sustainability Reporting Standards (ESRS) by reducing the number of data points, including qualitative disclosures, offering clarification and removing sector-specific standards. Omnibus’ alignment with global ISSB (International Sustainability Standards Board) reporting standards deepens interoperability across reporting needs. The global standard provides a framework for which foundational reporting requirements support your climate action plan. We suggest the following considerations:
1. Refocus your timeline
The extended timeline is an opportunity to move beyond compliance and instead embed impact into your business model. To protect your place in the market, reevaluate regulation requirements for your company with a quick assessment to see if/how you are still in scope under the Omnibus proposal. Use the time not to pause altogether, but to create focus and adjust your timeline as is best for your organization. Ask yourself where do these requirements create value for the business?
2. Capitalize on past efforts
All of your work to date will support future endeavors, so take comfort knowing there is no wasted work – this is an opportunity to stress test your efforts. For example, if you’ve already explored material topics you are well on your way to prioritizing this work, a materiality assessment is a core tool to build your sustainability strategy. Use this reset to revisit the challenges you’ve encountered to date and where you need to update your process for greater efficiency. If you already report on sustainability voluntarily (or have been thinking about taking that step in stakeholder communication), use the insights from CSRD preparation to enhance the reporting plan.
3. Prioritize data collection & stakeholder engagement
Take note of where Omnibus has identified core disclosures, including a quantitative focus and materiality. Robust sustainability metrics remain crucial for risk assessment. Climate disclosures will remain the bedrock of regulation, so expanding your purview to identify all IROs (Impact, Risks, Opportunities) internally and across your value chain will ensure you have an accurate measurement of your business performance. Engaging stakeholders early will support your ability to create a complete view and outline of data needs. Use an assurance focused mindset, understanding defensible data is the most useful data. Involve the entire organization and communicate needs and expectations early.
4. Find value in the reporting process
Instead of focusing on the risk, i.e. what will happen if you do not report, build a strategy that is supported by the reporting requirement and provides an advantage to the business. Continue refining your materiality assessment, ensuring it captures both financial risks and social and environmental impacts. If you’ve fallen outside the scope of Omnibus or qualify within the VSME (Voluntary Standard for SMEs) and are no longer included, stay on track by aligning with these leading requirements—value chain partners reporting under the CSRD may still request this information.
Focus on quantitative data, which is anticipated to stay protected, provides insight to refine your strategies and increase impact. Use reporting to empower, establish a baseline and set KPIs (Key Performance Indicators) to target action in the short term. Develop a plan for effective progress monitoring and reporting. Taking the time to build a strategic approach, will produce long-term goals that align with your business strategy. Stay aware of non-regulatory pressures (such as supply, demand and resource availability) to embed sustainability into your strategy and put into practice cross-functional collaboration. Use strategy aligned positive impact as your north star.
The Takeaway
Implementation of Omnibus for national member states in the European Union, (and countries following the EU’s lead) may take years, but now is the time to shift from simply meeting regulatory requirements to building internal strategies that drive resilience and competitive advantage. Focus on increasing transparency, readiness, and long-term impact. The cost of waiting far outweighs the benefits when it comes to securing a sustainable future. These changes highlight the importance of strengthening expertise and capabilities across your organization—and our consulting teams are here to help you prepare and thrive.
Please reach out to your PSC member representative at membersupport@petsustainability.org and our partner, Point B, for additional guidance and support navigating the latest climate regulations.