EU omnibus reforms:  Implications and opportunities for real estate

Over the past decade, the EU introduced several directives to support the Green Deal as well as global environmental goals, aiming to solidify sustainability efforts and enhance transparency. But concerns about the disproportionate cost on smaller businesses and the EU’s competitiveness in the global economy (recently highlighted in the Draghi report) prompted the EU to propose the omnibus reforms. 

Key changes featured in the package include eased ambit and extended timelines – “stop-the-clock”: the CSRD’s workforce and financial thresholds have been raised, exempting many small and mid-cap firms. Larger businesses not yet subject to the CSRD will gain around two additional years to prepare. However, companies that have already filed CSRD reports must continue doing so. For firms no longer in scope due to the proposed reforms, it is advisable to opt into voluntary reporting as it provides a way to manage requests from larger industry partners while sustaining transparency and credibility. Also, CSDDD compliance has been delayed to 2028, though firms must bear in mind compliance with national laws already put into effect by member states. 

Under CSDDD, due diligence will focus on direct (Tier 1) suppliers, while businesses will only need to review and update supply chain policies every five years, down from annually. Additionally, the European Sustainability Reporting Standards (ESRS) will see a reduction in required metrics, easing reporting obligations. For real estate firms handling data across multiple stakeholders, this is a welcome simplification. Yet, maintaining strong environmental, social, and governance (ESG) data practices remains key for managing risks and gathering valuable insight. Furthermore, former plans intended to introduce stricter industry-specific standards will not be pursued. 

Access to loans and subsidies remains closely tied to the EU Taxonomy for which the omnibus reforms have eased certain obligations for disclosure. Real estate firms are advised to continue aligning with taxonomy standards to ensure access to these funds while leading the industry in sustainability efforts. 

All things considered, the omnibus reforms reduce the immediate administrative burden for SMEs while retaining the core principles. For real estate stakeholders, the focus on understanding and managing the implications of new regulatory landscapes remains vital. Staying ahead of evolving standards and maintaining robust ESG practices will help firms enhance resilience, attract investment and contribute to a sustainable future.

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Peter Fassl has been a Partner at HSP.law, a Vienna-based law firm, since 2002. He has repeatedly been awarded in various rankings in his area of expertise which is Real Estate law.