Ready for Change After the Omnibus Package? Early Compliance With the European Sustainability Reporting Standards and Its Key Determinants in the New Regulatory Era

This paper examines companies' readiness for change in response to the evolving sustainability reporting regulatory landscape,shaped by the Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS).Drawing on institutional and strategic legitimacy theory, this study investigates a sample of 144 Italian-listed companies, dif-ferentiating between those that fall within and outside the scope of the Omnibus Package, to assess whether and how theirsustainability reporting practices comply with ESRS disclosure requirements. Additionally, this study examines the impact ofindustry environmental sensitivity, size, profitability and leverage on such compliance. A manual content analysis of the 2023Non-Financial Declarations (NFDs) reveals that according to the GRI–ESRS Interoperability Index, most GRI disclosures alignwith the relevant topical ESRS requirements, and firms have classified the bulk of these topics as material. Overall, companieswithin the Omnibus scope appear slightly better prepared for the forthcoming ESRS disclosure obligations than those outside it.The evidence further indicates that larger companies and those operating in environmentally sensitive industries achieve higherlevels of ESRS compliance and are more likely to treat ESRS topics as material.