Omnibus Directive Amending CSRD and CSDDD Requirements Enters into Force 18 March 2026 – National Implementation Pending

The Omnibus 1 Directive, which was published 26 February 2026, took effect from 18 March 2026. The Directive significantly narrows the scope of the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D).

The scope of the CSRD has been substantially reduced by raising the threshold to apply to companies with more than 1,000 employees and 450 million net annual turnover, leaving only the largest companies and groups falling under the mandatory reporting requirements of the revised CSRD. It has been estimated that the number of companies subject to mandatory sustainability reporting requirements in Finland would be reduced from 1,300 to approximately 130.

Pursuant to the Omnibus Directive, companies belonging to the wave one category that had to start reporting from the financial year 2024 and falling out of scope for the financial years 2025 and 2026 can apply a transition exemption.

Member states have until 19 March 2027 to transpose the changes to the CSRD and related directives into national law.

The Ministry of Economic Affairs and Employment prepared a government bill for amending the Accounting and Auditing Acts, implementing the Omnibus 1 Directive as regards the amendments to the CRSD (the “Bill”). The Bill has been submitted to Parliament for approval on 26 March 2026.

The Bill raises the threshold of the mandatory sustainability reporting requirement to reflect the level set by the Omnibus 1 Directive, i.e. to apply to companies with more than 1,000 employees and an annual turnover exceeding 450 million euros. Whether or not the company is listed on the main list of Nasdaq Helsinki no longer has an impact on the reporting obligation and there is no threshold linked to the balance sheet of the company.

The same thresholds are applied to groups of companies and groups exceeding the thresholds are obliged to prepare a group sustainability report as well as to companies outside the European Economic Area with annual turnover exceeding 200 million euros and exercising control over a Finnish company exceeding the 1,000 employee and 450 million euro thresholds or having a branch in Finland generating turnover in excess of 200 million euros.

The Bill is proposed to enter into force as from 30 June 2026 and to apply to financial years starting 1 July 2026 or thereafter. The amendments to the Accounting and Auditing Act may, however, be applied as from 1 January 2026 allowing companies no longer in the scope of the sustainability reporting requirements to opt out of reporting as from the financial year 2026.

The national transposition of the Omnibus 1 Directive includes some details not reflected in the directive. The explanatory text of the Bill notes that provisions in the Articles of Association concerning the appointment of a sustainability report assurer will be without effect if the reporting requirement no longer applies. Many companies initially elected to include provisions on the election of assurers in their articles when the CSRD originally started to apply.

The Bill also emphasises that companies may prepare sustainability reports on a voluntary basis. However, if limited sustainability information is included in the management report of the company without the intent to qualify as a voluntary sustainability report, it must be clearly identified that the information does not constitute a sustainability report as defined in the legislation.

The Omnibus 1 Directive limits the scope of the CS3D by raising its thresholds to companies with more than 5,000 employees and EUR 1,5 billion net turnover.

When it comes to penalties, businesses will be liable at a national level for failure to apply the rules correctly. The new directive provides for a maximum cap of 3% of the company’s net worldwide turnover.

Finally, the amending directive postpones the CS3D’s transposition deadline by member states into national law by another year, to 26 July 2028. Companies will have to comply with the new measures by July 2029.

Large, listed companies employing at least 500 employees and having either a turnover exceeding EUR 25 million or a balance sheet exceeding EUR 25 million were included in the first wave of reporting companies, obliged to produce sustainability reports from the financial year 2024 and onwards.

Following the Omnibus 1 Directive and the transposing Finnish legislation taking effect, companies included in the “Wave 1” reporting companies will need to assess whether they remain within the scope of mandatory sustainability reporting. Those “Wave 1” companies that fall outside the CRSD reporting obligation can still opt to continue reporting on a voluntary basis.

Other large companies exceeding the increased thresholds of 1,000 employees and EUR 450 million turnover may, however, need to prepare for reporting on sustainability matters from the financial year 2027 even if the company is not listed (and consequently were not caught by reporting requirement as a wave 1 company under the previous rules).

The concept of “Wave 2” and “Wave 3” companies for corporate sustainability reporting purposes has fallen away because of the Omnibus 1 Directive and the implementing legislation and the application of the reporting requirement being tied to the number of employees and turnover only.

Lastly, is should be noted that although a significant number of Finnish companies will fall outside the scope of mandatory sustainability reporting due to the Omnibus 1 Directive and national implementing legislation, it does not necessarily mean that companies can completely disregard sustainability reporting or keeping structured ESG information.

Expectations of customers, investors, lenders and insurers may impose a need to maintain, and report structured and transparent ESG information.

We will continue to monitor with great interest how the CRSD and CS3D reporting requirements will develop in Finland during 2026 and onwards.

If you have any questions concerning this Legal Alert, please contact the undersigned.