In early 2025, an important regulatory shift happened in the EU.
You may have heard: “CSRD scope has been substantially narrowed.” Did that make you wonder whether ESG requests are about to slow down?
The short answer: for a Korean SME manufacturing supplier, almost nothing changes. If anything, you’ll see more requests, not fewer.
This post explains what the 2025–2026 EU ESG regulatory changes actually are and what they mean in practice for Korean suppliers.
The Omnibus Package — what changed
In February 2025, the EU Council adopted the “Omnibus Package,” which simplifies CSRD and CSDDD.
What changed: narrowed CSRD scope
Original CSRD scope:
- Phased rollout starting from companies with 250+ employees, with planned expansion to SMEs
Post-Omnibus:
- Raised threshold: 1,000+ employees AND €450M+ net turnover
- Thousands of companies originally in scope are now exempt
What didn’t change: existing covered enterprises continue supply-chain due diligence
CSRD-covered enterprises already in scope (with mandatory disclosure obligations starting in 2024–2025) must continue their supply-chain due diligence. The relief was for newly-incoming companies; the obligations on already-covered companies were not lifted.
Why “the regulation was eased” doesn’t help suppliers
Three reasons regulatory relief at the top doesn’t reach the supplier level.
Reason 1: Korean SMEs were never the direct CSRD target
CSRD applies to EU-domiciled enterprises. Korean SMEs were never the direct subjects. Where suppliers feel the impact is the indirect path: CSRD-covered European primes performing supply-chain due diligence and requesting data from suppliers. That indirect path is unchanged.
Reason 2: Market expectations move faster than regulation
Plenty of European companies adopted ESG as a management principle ahead of any legal requirement. Bosch, Siemens, IKEA, H&M and others were already requesting ESG data from their suppliers before legal compulsion existed. Regulatory relief doesn’t make these requests go away.
Reason 3: More buyer relationships = more requests
For a Korean SME, expanding European exports or diversifying buyers is a growth strategy. More buyers means more ESG requests. Regardless of regulatory direction, the total volume of requests you face increases as your customer base grows.
Germany’s LkSG is independent and unchanged
Separate from the CSRD discussion: Germany’s Supply Chain Due Diligence Act (LkSG, Lieferkettensorgfaltspflichtengesetz) is unaffected by the Omnibus Package.
LkSG is German national law, not an EU directive — it operates on its own track.
LkSG impact on Korean suppliers
German enterprises (1,000+ employees) must manage human-rights and environmental risk across their supply chain. To do this, they ask Korean suppliers for:
- Confirmation that human-rights policies and risk assessments are in place
- A declaration against forced and child labor (sometimes notarized)
- A signed Supplier Code of Conduct
- An environmental risk management plan
Korean suppliers selling into Germany should plan for LkSG-driven requests independent of CSRD.
VSME formalization — likely trajectory
The European Commission’s adoption of VSME as an official recommendation in July 2025 was a meaningful signal.
Where VSME stands today
- Voluntary reporting standard (not legally mandated)
- Officially recommended by the European Commission
- Banks, investors, and large enterprises encouraged to use it when requesting SME ESG data
Likely direction
The EU is positioning VSME as the “voluntary linkage standard” for CSRD — and as adoption widens, it’s poised to become the de facto standard format for supply-chain ESG data requests. There’s no concrete legislative timeline yet, but adoption alone will solidify it.
Practical implication: If you organize your data once using VSME today, future requests standardizing on VSME will need no additional preparation.
Korean domestic regulation is also tightening
Independent of EU regulation, ESG expectations on Korean suppliers are rising domestically.
Key trends
Korean conglomerate supplier ESG evaluation is becoming routine. Samsung, Hyundai Motor, LG, SK, Lotte and others have made supplier ESG evaluation regular practice. Some require EcoVadis registration; others send their own supplier ESG questionnaires.
Government policy direction. Korea’s Ministry of Environment, Financial Services Commission, and Ministry of SMEs and Startups are all moving toward strengthening SME ESG support and requirements. Guidelines and assistance programs for supply-chain ESG management are expanding.
Bottom line: Even without European exports, Korean suppliers serving domestic conglomerates need an ESG response capability now.
What to do now vs. what can wait
You don’t need to do everything at once. Prioritize.
Do now
(1) Start collecting energy and GHG data Scope 1·2 emissions show up in every ESG request. Just collecting electricity and gas bills monthly puts you halfway there.
(2) Audit certification expiries Check expiry dates on CE certifications, ISO certifications, tax compliance certificates today. Anything expiring within 6 months — schedule renewal now.
(3) Document submission history Record what you’ve submitted, to whom, when. Next time a request lands, “we sent something similar to Buyer A last time” is the difference between hours and weeks of work.
Do within 6 months
(4) Complete an initial VSME Basic Module (B1–B11) data set First time takes effort, but the data is reusable for every subsequent request. Use Episode 3 and Episode 4 as your guides.
(5) Build the internal data collection system Department contact list and an annual data update routine — see Episode 5.
Can wait
(6) EcoVadis registration Don’t preemptively register on EcoVadis without a buyer request. The cost-benefit isn’t there until a buyer specifically asks.
(7) GHG reduction targets This is a Comprehensive Module (C3) item. Setting targets before the Basic Module data is in place is the wrong sequencing. Wait until your data collection is established.
(8) Third-party verification External assurance of ESG data isn’t required until you reach disclosure obligations at the large-enterprise level.
Closing the series
Across six posts we covered the full European ESG request landscape.
Episode 1 explained why the requests are happening. Episode 2 compared the formats. Episodes 3 and 4 walked through VSME end-to-end. Episode 5 covered building a reusable structure. This post sketched the regulatory direction.
ESG requests aren’t going away. But once the system is in place, the next one doesn’t restart from zero.