The CS3D Omnibus Is Here: What Changed and What It Means for Your Business

The CS3D Omnibus has officially landed. The EU published Directive 2026/470 in the Official Journal on 26 February 2026, and it enters into force on 18 March 2026. If your organisation has spent the past year bracing for the Corporate Sustainability Due Diligence Directive, pay close attention. The rules have shifted considerably. Fewer companies now fall in scope, the deadlines have moved, and the EU has trimmed or removed several key obligations. Let’s walk through what happened, what it means, and what you should do right now.

What did the original CS3D require?

A quick reminder of where things stood before. The original CS3D, approved by the European Parliament in April 2024 and formally adopted by the Council in May 2024, entered into force on 25 July 2024. It required large companies to identify, prevent, and mitigate adverse human rights and environmental impacts across their value chains. The scope caught EU companies with more than 1,000 employees and €450 million in net worldwide turnover. Non-EU companies hit the same turnover threshold within the EU.

Companies had to look beyond their own operations. They needed to assess the activities of subsidiaries and business partners, including indirect ones. The directive also imposed a mandatory climate transition plan, a harmonised EU-wide civil liability regime (allowing trade unions and NGOs to bring claims), and a minimum maximum penalty of 5% of net worldwide turnover. Member States had to transpose all of this into national law by 26 July 2026.

It was, in short, a lot. And the pushback from the business community was significant.

So what triggered the Omnibus?

The European Commission proposed the Omnibus I package on 26 February 2025. It responded directly to concerns raised in the Draghi and Letta reports about European competitiveness and regulatory overload. The European Parliament approved it on 16 December 2025. The Council gave its final green light on 24 February 2026. The result is what Brussels has called a “simplification revolution.”

Here’s what shifted.

How has the scope changed?

This is the headline change. The employee threshold has jumped from 1,000 to 5,000 employees. The turnover threshold has risen from €450 million to €1.5 billion in net worldwide turnover for EU companies. For non-EU companies, the directive now only applies where EU turnover exceeds €1.5 billion, with no employee threshold.

There’s also a separate category for franchise or licensing arrangements. Companies with EU royalties exceeding €75 million and net turnover above €275 million remain in scope.

What happened to due diligence?

The Omnibus has streamlined the process into two stages. First, companies carry out a scoping exercise based on reasonably available information. This focuses on areas where adverse impacts are most likely and most severe. Only after that does an in-depth assessment kick in, and even then, companies may prioritise their direct business partners. The blanket requirement to trace risks deep into indirect supply chains is, for now, behind us.

Did the climate transition plan survive?

No. The Omnibus deleted the obligation for companies to adopt and implement a climate transition plan under CS3D entirely. That said, the separate obligation under the CSRD to disclose a transition plan (where one exists) still stands. Companies aren’t off the hook on climate disclosures. They simply no longer need to create and execute a plan under this specific directive.

What about civil liability and penalties?

The Omnibus removed the harmonised EU-wide civil liability regime. It also removed the provision allowing trade unions and NGOs to bring representative actions under a unified EU framework. Civil liability can still arise under national tort law, and some Member States may still allow activist organisations to bring claims. But the mandatory, EU-harmonised layer no longer exists.

On penalties, the maximum has dropped from a minimum maximum of 5% to a cap of 3% of net worldwide turnover. The European Commission will issue guidelines on calculation. Importantly, where a company has prioritised the most severe and likely adverse impacts, it won’t face penalties simply for not yet addressing a less significant impact.

When do the new deadlines apply?

Member States now have until 26 July 2028 to transpose CS3D into national law. Companies must comply by 26 July 2029. Reporting obligations under Article 16 of CS3D apply from 1 January 2030. That’s roughly a two-year delay across the board compared to the original schedule.

Why does all of this matter in practice?

For multinational groups, the practical effects are substantial.

The scope reduction means that many companies preparing for CS3D compliance may now fall outside the directive’s reach. If your group has fewer than 5,000 employees or generates under €1.5 billion in turnover, reassess whether the directive still catches you. This matters especially for mid-cap companies that invested heavily in due diligence frameworks under the original thresholds.

The streamlined due diligence approach reduces the operational burden for companies that remain in scope. Focusing on a scoping exercise first, then prioritising direct business partners, is more manageable. But “more manageable” doesn’t mean “easy.” Getting the scoping exercise right demands robust internal processes, clear documentation, and a genuine understanding of where the most severe risks sit.

The removal of the climate transition plan obligation and the EU-harmonised civil liability regime reduces legal exposure. But stay alert. National laws may still impose transition planning requirements. Civil liability under Member State tort regimes hasn’t disappeared. The regulatory environment remains complex.

What should you do right now?

Even with the extended timelines, there’s work to do. The Omnibus I Directive enters into force on 18 March 2026. Member States will begin the transposition process shortly after.

• Reassess your scope. Review your group’s employee numbers and turnover figures against the new thresholds. If you previously fell in scope under the original CS3D parameters, confirm whether you still do. Don’t overlook the franchise and licensing provisions.
• Update your due diligence framework. If you remain in scope, adjust your approach to reflect the two-stage process. Run the scoping exercise first, then move to the in-depth assessment. Focus on areas where risks are most likely and most severe. Prioritise direct business partners.
• Review your penalty and liability exposure. The removal of the harmonised civil liability regime matters, but it doesn’t eliminate risk. Map out how national transposition in your key jurisdictions may handle liability. This is especially important if you operate in Member States with active environmental or human rights litigation.
• Align your CSRD and CS3D preparations. The CSRD thresholds (1,000 employees, €450 million turnover) and the CS3D thresholds (5,000 employees, €1.5 billion turnover) no longer align. Companies caught by CSRD but not CS3D still have sustainability reporting obligations, but their due diligence burden drops. Make sure your compliance team understands the distinction.
• Monitor national transposition. Member States have until 26 July 2028 to transpose CS3D. How individual countries implement these rules will vary, especially around penalties, liability, and harmonisation. Keep an eye on developments in your key jurisdictions.

What’s next?

Managing regulatory change of this scale requires detailed planning and full legal awareness. For more insights into compliance processes across jurisdictions, explore our article, France UBO Enforcement Tightened Since June 2025.

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