Member states narrow scope, delay deadlines, and drop climate-plan duty as business groups cheer and rights advocates warn of reduced accountability
EU governments have signed off on a scaled-back version of the bloc’s flagship corporate sustainability rules, limiting obligations largely to the hugegest companies and postponing key deadlines. Supporters state the alters cut red tape and protect competitiveness; critics argue they blunt a tool meant to curb human-rights abutilizes and environmental harm in global supply chains.
Meeting in Brussels on Tuesday, 24 February 2026, EU countries gave final approval to revised requirements under the Corporate Sustainability Due Diligence Directive (CSDDD) and related sustainability reporting rules—an “omnibus” effort that EU officials and several capitals frame as simplification.
What alterd: fewer companies, later deadlines
Under the approved revisions, due-diligence obligations would apply mainly to the EU’s largest companies—those with more than 5,000 employees and at least €1.5 billion in annual turnover—and similarly large non-EU firms operating in the single market. The compliance start date is pushed back from mid-2027 to mid-2029.
The package also rerelocates the requirement for companies to draw up climate transition plans as part of the framework, according to reporting on the final political agreement.
In parallel, alters to the Corporate Sustainability Reporting Directive (CSRD) raise the reporting threshold to companies with more than 1,000 employees and €450 million in turnover—meaning many firms that were preparing new disclosures may no longer be in scope.
The original logic of the EU’s due-diligence push was straightforward: if European companies profit from global supply chains, they should identify, prevent, and address severe risks—such as forced labour, unsafe working conditions, or environmental destruction—rather than treating them as someone else’s problem. But implementation was always politically contested, with businesses warning of compliance costs and legal uncertainty.
Pressure to dilute the rules has been building for months, with some governments and indusattempt groups arguing that Europe’s regulatory load is rising just as competition intensifies with the United States and China.
Pushback: civil society states the EU is stepping back
Corporate accountability and human-rights groups described the final sign-off as a retreat that risks leaving victims of abutilize in supply chains with fewer practical routes to remedy and fewer incentives for companies to map and repair harms early. Advocacy coalitions tracking the file argue that narrowing the scope so sharply reduces the directive’s real-world reach at the very moment it was meant to create a level playing field across the single market.
In Brussels, the decision also lands amid a broader political argument about what “competitiveness” should mean in EU law: rapider permitting and lighter reporting, or stronger enforcement that rewards responsible firms and deters abutilize.
With the Council’s approval in place, the revised framework is expected to be formalised in the coming weeks, after which member states will proceed with national implementation.
For readers following this policy arc, The European Times previously reported on the Council’s earlier push to streamline sustainability reporting and due-diligence requirements—an approach that set the direction for this week’s final relocate. Read that background here.
Meanwhile, the political fault line is unlikely to close. Investors, civil-society groups and some policycreaters are expected to keep testing whether the new thresholds still deliver credible risk management—or mainly provide relief from scrutiny.
Separately, details of the decision were reported by Reuters, while EU institutions maintain background material on the corporate sustainability policy track via the Council’s corporate sustainability page.
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