EU strikes deal to simplify sustainability reporting, due diligence requirements
Dec 10, 2025
Brussels [Belgium], December 10: European Union members and parliament on Tuesday reached a provisional agreement to simplify sustainability reporting and due diligence requirements to boost EU competitiveness.
The agreement simplifies the directives on corporate sustainability reporting (CSRD) and corporate sustainability due diligence (CS3D) by reducing the reporting burden and limiting the trickle-down effect of obligations on smaller companies.
According to the informal agreement, social and environmental reporting will only be required for EU companies employing on average over 1,000 employees and with a net annual turnover of over €450 million. The net turnover threshold has also been increased for non-EU companies to €450 million generated in the EU for sustainability reporting.
Co-legislators also agreed on further simplification of the reporting requirements which should become more quantitative, while sector-specific reporting would become voluntary. They ensured smaller companies with under 1,000 employees are protected from shifting responsibility for reporting, as the updated rules allow them to refuse reporting information beyond what is set out in the voluntary standards.
MEPs made sure that the Commission will create a digital portal for businesses with access to templates and guidelines on EU and national reporting requirements.
According to the agreement, only large EU corporations with more than 5,000 employees and a net annual turnover of over €1.5 billion will need to carry out due diligence to minimise their negative impact on people and the planet. The rules will also apply to non-EU corporations with a turnover in the EU above the same threshold.
Companies should adopt a risk-based approach in their chain of activities and should refrain from requiring unnecessary information from companies not included in the scope.
Businesses within the scope of the revised due diligence rules will no longer need to prepare a transition plan to make their business model compatible with the Paris Agreement. They will remain liable at national rather than EU level for non-compliance and could face fines of up to 3 percent of the company's net worldwide turnover, the guidance on which will be provided by the Commission and member states.
Source: Emirates News Agency
