On 26 February 2026, the European Commission published its simplification package known as the **Omnibus**, which substantially raises the thresholds of the Corporate Sustainability Reporting Directive (CSRD). This is the news many mid-market executives had been waiting for: fewer companies will be directly required to comply with CSRD. But the conclusion that "this does not affect us" would be premature and, in many cases, wrong.
The pressure to report on sustainability does not disappear with the Omnibus. It changes form. Spanish mid-market companies with turnover between €5M and €50M face a landscape where the demand is no longer purely regulatory: it comes from their customers, their banks and their prospective buyers. This article explains precisely what has changed, what remains in force, and how to prepare intelligently.
What CSRD Is and How It Differs from the Previous NFRD
CSRD (Directive 2022/2464/EU) replaced the Non-Financial Reporting Directive (NFRD), which had been in force since 2014 and applied to only around 11,000 companies across Europe — predominantly large listed groups. The shift is qualitative: CSRD expands scope to potentially 50,000 companies in Europe, introduces the European Sustainability Reporting Standards (ESRS), requires a double materiality assessment, and makes reports auditable and digitally tagged in XBRL format.
The ESRS are 12 sector-agnostic standards approved by the Commission in July 2023, grouped into three areas:
- Environmental (E): climate change, pollution, water and marine resources, biodiversity and ecosystems, resource use and circular economy.
- Social (S): own workforce, workers in the value chain, affected communities, consumers and end-users.
- Governance (G): business conduct, corporate culture and ethics, management of supplier relationships, prevention of corruption and bribery.
Unlike previous voluntary frameworks such as GRI or CDP, the ESRS are mandatory for in-scope companies, include requirements for external verification, and must be integrated into the ordinary management report. This transition from “voluntary CSR reporting” to “audited accounting obligation” is the most profound change CSRD brings.
The 2026 Omnibus Package: What Changes and What Remains
On 26 February 2026, the European Commission published the Omnibus package with the declared aim of reducing administrative burden on European businesses. The most relevant changes for CSRD are:
New direct obligation thresholds: The Omnibus proposes raising the threshold from the current more than 250 employees and more than €50M turnover, to more than 1,750 employees and more than €450M turnover (or total assets exceeding €25M). This substantially reduces the universe of directly obligated companies in Europe.
Removal of the listed SME standard (voluntary VSME): The proposal eliminates the obligation for listed SMEs to report under a specific standard, though it maintains a simplified voluntary standard (VSME) for those wishing to adopt it.
Limitation of value chain information requests: The proposal restricts large companies from automatically cascading their information obligations down to mid-market and small suppliers. A fixed list of information that can be requested from the supply chain is established, reducing the pressure cascade.
Important qualification: As of the publication date of this article (March 2026), the Omnibus package is a legislative proposal from the Commission, not a regulation in force. It requires approval from the European Parliament and the Council — a process likely to extend into late 2026 or early 2027. In the meantime, the current CSRD thresholds remain the applicable legal reference.
Spain’s transposition of CSRD, still pending in March 2026, will need to incorporate these changes into national law once the final European text is approved.
The Current Position in Spain: Law 7/2021 and Pending Transposition
Spain has an existing framework that does not disappear with CSRD: Law 7/2021 on Climate Change and Energy Transition, which already requires certain companies to publish information on climate risks and emissions management. This law is independent of the CSRD transposition and applies to:
- Listed companies with more than 500 employees or more than €20M in assets.
- Public interest entities with more than 500 employees.
- Consolidated groups exceeding similar thresholds.
Additionally, Royal Decree-Law 18/2017 (transposing the original NFRD) already required the Non-Financial Information Statement (EINF) from certain large companies. CSRD will supersede this framework, but both requirements coexist during the transitional period.
Spain’s formal transposition of CSRD was due by July 2024, a deadline Spain missed alongside other Member States. The European Commission opened infringement proceedings. In early 2026, the Ministry of Economy is advancing a draft Sustainability Information Act, which will likely be the transposition vehicle. Until it is enacted, the applicable reference is the Directive directly and the existing EINF framework.
Why Mid-Market Companies Must Act Even Without a Direct Obligation
This is the most misunderstood point in the CSRD debate in the Spanish market. The direct obligation to report under the ESRS is not the only reason to prepare. There are four pressure vectors affecting mid-market companies regardless of whether they exceed the thresholds:
1. Supply Chain Pressure
Large companies directly obligated under CSRD must report on their value chain: scope 3 emissions, labour conditions in suppliers, management of social and environmental risks in third parties. To comply, they need data from their suppliers. A mid-market Spanish manufacturer supplying Inditex, Mercadona, or any group with more than 1,750 employees will receive formalised sustainability questionnaires. Without data, they lose the contract or are placed at a competitive disadvantage.
The Omnibus package attempts to limit this cascade pressure with a fixed list of information requestable from suppliers. But market practice is already established: major clients ask, and those who answer well gain a stronger position.
2. ESG Criteria in Bank Financing
The EU Taxonomy Regulation (2020/852) and sustainability information guidelines for financial institutions oblige banks to classify what percentage of their assets finance activities aligned with the green taxonomy. To do so, banks need ESG data from their borrowers.
In practice, since 2024, Spain’s major banks (BBVA, Santander, CaixaBank) have included ESG questionnaires in their due diligence processes for credit approval, sustainable ICO credit lines and structured finance. Companies that provide verified data obtain better conditions. Those with nothing to show face higher spreads or outright exclusion from certain products.
This pressure is not removed by the Omnibus. It is purely financial in origin and will continue to grow.
3. Buyer and Private Equity Due Diligence
If your company has a realistic prospect of a sale, merger or private capital entry in the next five years, the absence of structured ESG data is a valuation risk. European private equity funds, obligated under the SFDR Directive to classify their funds as Article 8 or Article 9, need verifiable ESG data from their portfolio companies.
An M&A process without structured ESG information generates a negative price adjustment or a condition precedent that delays closing. In our experience, the “ESG discount” in transactions where the seller has no data is typically between 3% and 8% of enterprise value.
4. Competitive Advantage and Public Procurement
The Corporate Sustainability Due Diligence Directive (CSDDD), which complements CSRD with a different scope, obliges large companies to audit and manage risks in their supply chains. European public procurement tenders increasingly incorporate ESG criteria in offer evaluation. Mid-market companies that anticipate these requirements gain share in tenders and contracts where previously no non-financial differentiators existed.
The 5 Steps to CSRD Readiness
Regardless of whether your company is directly obligated today or will be in the future, the preparation process always follows the same sequence. The key is not to try to do everything at once: the first phase can be completed in 8-10 weeks with a small team.
Step 1: Gap Analysis
Before knowing what needs to be done, you need to know where you stand. The gap analysis answers three questions: What direct obligation scope are we in (today and likely in 2027)? What ESG data do we already collect, even if unsystematically? What governance structure exists to oversee sustainability matters?
The output is a map of current state versus applicable minimum ESRS requirements, with prioritisation by impact and effort.
Step 2: Double Materiality Assessment
The double materiality assessment is the methodological core of CSRD and the element that generates the most confusion. The aim is to identify which sustainability topics are material for the company from two simultaneous perspectives:
- Impact materiality: What significant impacts does the company have on the environment and people, positive and negative, actual and potential?
- Financial materiality: What sustainability-related risks and opportunities could materially affect the company’s financial position, performance or cash flows?
A topic may be material only for impact, only financially, or for both reasons. ESRS 1 establishes that the company must report in depth on all topics that are material under either perspective.
Practical example for a Spanish manufacturer: A manufacturer of metal components in Murcia with 180 employees and €28M turnover. Its double materiality assessment would identify as material:
- For impact materiality: Energy consumption and CO2 emissions from the production process (actual environmental impact). Working conditions on the factory floor (health and safety, actual social impact). Management of metal waste and use of virgin raw materials.
- For financial materiality: Risk of increased costs from carbon pricing (EU ETS and CBAM for imported steel). Risk of losing OEM clients that require ESG criteria. Opportunity to access green financing at better cost.
This same company might not consider topics such as marine biodiversity or rights of indigenous communities to be material — these are relevant in other sectors but not in its specific activity. The materiality assessment justifies exactly what is reported and what is not.
The standard process involves: review of sectoral and geographical context, internal consultation (management and employees) and external consultation (key clients, key suppliers, lenders), followed by a validation meeting with the governing body. It must be documented and auditable.
Step 3: Data Collection Framework
Once the material topics are defined, the measurement system must be built. For most mid-market companies, this does not require specialised software in the first iteration: a well-structured spreadsheet system with clear ownership and verified sources is sufficient for the first year.
Key quantitative data that almost every company will need to collect:
Environmental (Climate/Energy):
- Total energy consumption (MWh) by source (grid electricity, natural gas, diesel, own renewables).
- Scope 1 emissions (own combustion and fleet vehicles).
- Scope 2 emissions (purchased electricity, using supplier emission factor or national grid factor).
- If relevant by materiality: scope 3 emissions, priority categories (purchased goods, transport, product use).
Social (Workforce):
- Headcount by contract type, gender, age and professional category.
- Accident rate (LTIFR) and occupational diseases.
- Training hours per employee.
- Gender pay gap (for companies with more than 50 employees, already mandatory under Spanish labour law).
Governance:
- Composition of the governing body (gender, independence, sustainability expertise).
- Existence of an anti-corruption policy and whistleblowing channel.
- Documented ethical incidents.
Step 4: Sustainability Report Draft
With data collected and the materiality assessment complete, the report draft follows the structure defined by the applicable ESRS. The report must be integrated into the management report (it is not a separate document under CSRD), include the required quantitative indicators, and explain the strategy, targets and transition plan for material topics.
For the first edition, it is advisable to adopt a strict materiality approach: report in depth only on clearly material topics and rigorously explain why others are not. The temptation to produce a comprehensive report covering all possible ESRS typically results in documents with poor analytical quality that convince no stakeholder.
Step 5: Preparation for External Verification
CSRD requires verification (assurance) of the sustainability report. In a first phase, the regulation allows limited assurance (equivalent to a review). From 2028, the Commission will assess whether to raise the requirement to reasonable assurance, equivalent to the financial audit standard.
Preparing for external verification means: having documentary evidence of reported data, being able to trace it back to its primary source, and having involved the governing body in approving the report. Accredited verifiers in Spain are primarily the four large audit firms and some mid-market firms. The tendering and verifier selection process should begin at least six months before the report publication date.
Double Materiality in Depth: The Concept That Defines Everything
It is worth dwelling on double materiality because it is the most distinctive element of CSRD compared to any previous framework and the one that requires the most rigour to execute correctly.
Impact materiality starts from a different question to what business leaders are accustomed to: not “what risks affect my company?” but “what effects does my company have on the world?” This includes positive effects (quality employment, innovation, services that improve lives) and negative effects (emissions, waste, poor labour conditions in the value chain).
Financial materiality is a more familiar concept for management teams: which ESG topics could affect the company’s revenues, costs, assets or access to capital in the short, medium and long term?
The most frequent conceptual error is treating double materiality as two independent analyses that are then combined. In reality, there are significant interdependencies: an environmental impact generated by the company can become a financial risk if it is regulated or if clients penalise it. The assessment must capture these connections.
The ESRS establish qualitative materiality thresholds: an impact is material if it is significant in terms of severity (gravity, geographical scope, reversibility) for negative impacts, or scale for positive impacts. A financial risk or opportunity is material if it can reasonably be expected to affect the company’s future financial prospects.
There is no single mandatory numerical scale. Companies have methodological flexibility to define their own scoring scales, provided these are documented, applied consistently and approved by the governing body.
Realistic Costs and Timelines
One of the main barriers to mid-market companies addressing CSRD is the perception that it is a huge and costly project. The reality is more nuanced and depends heavily on the ambition of the first report and the quality of existing data.
For a company of 50-150 employees and €5M-€20M turnover:
- Gap analysis + double materiality assessment: €8,000-€15,000 with external adviser (6-8 weeks).
- Data collection framework + first data collection: €5,000-€10,000 (internal work with external support).
- Report draft: €8,000-€15,000.
- Total first-year cost: €21,000-€40,000.
For a company of 150-500 employees and €20M-€50M turnover:
- Gap analysis + double materiality assessment: €15,000-€25,000.
- Data framework (possibly with basic digital tool): €10,000-€20,000.
- Report draft: €15,000-€25,000.
- External verification (limited assurance): €10,000-€20,000.
- Total first-year cost: €50,000-€90,000.
In the second and third years, costs fall by 40%-60% as the framework is already built. The cost of not acting — valuation discounts, contract losses, higher bank spreads — typically exceeds these amounts.
Realistic 12-month implementation timeline:
| Month | Activity |
|---|---|
| 1-2 | Gap analysis, stakeholder mapping, management team briefing |
| 3-5 | Double materiality assessment (internal and external consultations, board validation) |
| 6-7 | Data collection framework design, ownership assignment |
| 8-9 | First data collection (current year or historical data) |
| 10-11 | Report draft, internal review |
| 12 | Final review, governing body approval, publication |
Common Mistakes That Inflate Costs
In our experience supporting companies in preparing their first sustainability reports, these are the mistakes that most frequently generate rework and additional costs:
Treating CSRD as a formal compliance exercise. Companies that approach the sustainability report as a bureaucratic requirement to manage with minimum effort produce documents that convince no stakeholder: not the clients who request it, not the banks who evaluate it, not the auditors who verify it. The real value of the process lies in improved internal management, and that requires genuine executive involvement.
Ignoring scope 3 emissions. Most manufacturing companies have more than 70% of their emissions in scope 3 (primarily purchases of raw materials and energy embedded in products, and transport). A report that only covers scopes 1 and 2 without at least attempting to estimate material scope 3 categories will be insufficient for any verification and will not answer the questions of clients obligated under CSRD.
No real governance over sustainability. CSRD requires the governing body to approve the double materiality assessment and oversee the management of material topics. In many mid-market companies, sustainability is informally the responsibility of someone in HR or communications, without budget or board reporting. This invalidates the process from the outset. Board or management committee involvement is not optional.
Starting with expensive tools before having the process. The ESG software market is saturated with tools that promise to automate everything. For the first iteration, it is almost always more efficient to build the process manually and understand what data is needed before investing in platforms that can cost €20,000-€80,000 annually. Automation makes sense from the second year, when you already know exactly what data needs to be collected and where it is.
Delegating everything to the external adviser. An adviser can design the methodology, facilitate the process and draft the report. But the materiality assessment requires genuine knowledge of the business, and ESG data only exists in the company’s internal systems. Projects where the company is a passive recipient of the consultant’s work invariably produce lower quality reports and an internal team that has not learned to manage the data the following year.
The BMC Approach: Integrating ESG, Tax and Governance
At BMC, we approach CSRD in an integrated way with tax advisory and corporate governance, because these three dimensions are increasingly interconnected.
ESG and taxation: The European carbon tax (EU ETS), the Carbon Border Adjustment Mechanism (CBAM for imports of steel, aluminium, cement, fertilisers and electricity) and future taxes on single-use plastics create direct tax obligations derived from the company’s emissions profile. A company that does not measure its emissions cannot manage its tax exposure to these new levies. R&D tax credits linked to decarbonisation projects are another vector: investments in energy efficiency and capture technologies can generate meaningful tax deductions that are only captured if an ESG measurement framework exists.
ESG and corporate governance: CSRD requires companies to describe how the governing body oversees material sustainability topics. For many mid-market companies, this forces a genuine first reflection on the formal design of their governance: does an audit committee exist? What information does the board receive on non-financial risks? Is there someone with explicit sustainability responsibility with a direct line to the board? This governance redesign, done properly, simultaneously improves management quality and the company’s risk profile for banks and buyers.
The BMC model: Our CSRD preparation service for mid-market companies combines the first four months of diagnosis and materiality (with our corporate advisory team), the tax integration of identified climate risks (with our tax team), and the redesign of governing bodies and board reporting (with our corporate governance team). The result is a transformation project with real operational value, not merely a report.
If your company is assessing how to approach CSRD or needs to understand whether the Omnibus changes affect it directly, contact our ESG and sustainability team. We provide a no-cost initial diagnostic for mid-market Spanish companies with turnover between €5M and €100M.
