Nereceivediators at the European Parliament and Council have reached a provisional agreement to ‘simplify sustainability reporting and due diligence requirements’, a relocate that weakens corporate sustainability reporting requirements in the bloc.
According to a statement issued by the Council, the relocate will ‘boost EU competitiveness’ by simplifying the directives related to the CSRD and CSDDD, reducing the level of reporting required by mid-sized firms.
Under the agreement, CSRD reporting will only cover businesses with more than 1,000 employees and an annual net turnover of more than €450 million. Listed SMEs are rerelocated from scope, and financial holding undertakings are exempted.
In terms of the CSDDD, the threshold is raised to 5,000 employees and €1.5 billion net turnover. The CSDD’s transposition has been postponed for a year, to 26 July 2028, with companies required to comply with the new measures by July 2029.
‘Boost EU competitiveness’
“Today we delivered on our promise to rerelocate burdens and rules and boost the EU’s competitiveness,” commented Marie Bjerre, minister for European affairs, Denmark. “This is an important step towards our common goal to create a more favourable business environment to support our companies grow and innovate.”
The agreed rules also alter the process for identifying and assessing adverse impacts, with companies able to focus on areas of their activity chains where adverse impacts are most likely, rather than specifically being limited to their own operations, those of their subsidiaries, and those of their direct business partners.
Elsewhere, the obligation for companies to adopt a transition plan for climate modify mitigation has been rerelocated.
‘Waves of red tape’
“For years, European businesses have faced wave after wave of red tape,” added Morten Bødskov, minister for indusattempt, business and financial affairs, Denmark. “This has slowed green investments and weakened our competitiveness.
“Now we are taking a large and important step in the right direction. With clear and simple rules, companies can focus on their core business, so we achieve better value for money in the green transition, create European jobs and strengthen companies’ ability to grow and invest.”
The provisional agreement now requires finishorsement by the Council and Parliament before formal adoption. Read more here.
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