On 4 July 2025, the European Commission adopted a delegated act that amends the EU Taxonomy Regulation’s delegated acts as part of the broader ‘Omnibus I’ initiative to ease compliance burdens. These updates aim to simplify templates, clarify materiality thresholds, and refine how companies—both financial and non-financial—report sustainable activities.

The amendments are now under a four-month scrutiny period by the European Parliament and Council (potentially extendable to six months) and will become effective 1 January 2026, though companies may opt in early for fiscal year 2025. These changes apply only to how disclosures are made, not to which entities must disclose—further scope updates are expected later this year.

Key Impacts for Non-Financial Companies

• Materiality thresholds: Companies will no longer need to assess all activities for taxonomy eligibility if they fall below defined quantitative or qualitative thresholds. These non-material activities must still be reported with context, but in a simplified format.

• Simplified ‘Do No Significant Harm’ (DNSH) criteria: The act updates rules around chemical use and exemptions, offering immediate relief without waiting for the broader review of technical screening criteria.

• Streamlined templates: All entities, including those in nuclear and fossil gas sectors, will use updated, shorter templates—replacing the previously separate reporting structures.

Key Impacts for Financial Institutions

• New materiality thresholds: Assets and exposures below set thresholds may be excluded from Taxonomy alignment assessments—but must still be disclosed with relevant context.

• Changes to KPI calculations: Certain assets (e.g., derivatives, cash, interbank loans) are now excluded from both the numerator and denominator of KPIs. Exposures to non-CSRD entities are also excluded—unless the entity is voluntarily reporting or meets specific use-of-proceeds criteria.

• Transition flexibility: Until end-2027, financial institutions may opt out of KPI reporting entirely—provided they make no claims of Taxonomy-aligned activities and explicitly state this in their management reports.

• KPI delays: Reporting on fees, commissions, and trading books is deferred until 2028.

Sector-Specific Notes

• Nuclear and fossil gas activities will no longer have separate reporting templates. Instead, they will be disclosed in aggregate within the main taxonomy templates.

• Financial institutions must include Special Purpose Vehicles (SPVs) in KPI denominators if they finance CSRD-aligned activities, ensuring better transparency around sustainability-linked structures.

What’s Next

Pending review by Parliament and Council, the amendments will take effect 20 days after publication in the EU’s Official Journal. They become mandatory for reporting periods beginning 1 January 2026 but can be adopted voluntarily for 2025.

The European Commission also signaled a forthcoming comprehensive review of technical criteria, including DNSH requirements, to better align disclosures with existing EU law and reduce complexity.