EU member state representatives have agreed on the Council’s negotiating position to simplify corporate sustainability reporting and due diligence requirements, with the goal of enhancing business competitiveness across the bloc. The proposed changes target the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D), aiming to reduce administrative burdens and limit the impact on smaller companies.
The revised CSRD proposal raises the employee threshold for in-scope companies to 1,000 and excludes listed SMEs. The Council has added a net turnover threshold of €450 million and included a review clause to assess whether broader reporting is needed in the future.
For CS3D, the Council proposes limiting due diligence obligations to companies with at least 5,000 employees and €1.5 billion in turnover, focusing on those with the greatest influence over their value chains. Due diligence requirements will apply primarily to direct business partners (“tier 1”), and companies will be required to undertake risk-based, rather than entity-wide, assessments using reasonably available data.
The Council’s position also simplifies climate-related obligations by postponing the requirement to adopt transition plans by two years and limiting the obligation to plan adoption, with supervisory bodies offering guidance on implementation.
The mandate retains the Commission’s proposal to remove a harmonised EU liability regime and delays CS3D transposition by one year, to 26 July 2028.
These reforms form part of the Commission’s ‘Omnibus I’ package, introduced in February 2025 to streamline EU sustainability legislation. Negotiations with the European Parliament will commence once it finalises its position.
