The European Commission is set to reduce the number of companies subject to EU sustainability reporting requirements as part of its drive to cut red tape for businesses, according to a draft document.
Brussels is expected to publish an “omnibus” proposal next week aimed at simplifying green rules, with the objective of making local industries more competitive. This move comes as part of a broader response to calls, including US President Donald Trump’s promise to scrap regulations.
The proposal emerges amid divided opinions within the EU. While Germany and France are urging a relaxation of the green reporting rules, countries such as Spain contend that these measures are crucial to upholding the Union’s environmental and human rights values.
A partial draft of the upcoming proposals indicates that the Commission intends to amend the corporate sustainability reporting directive. Under the draft, only companies with more than 1,000 employees and a net turnover exceeding €450 million ($471 million) would be required to disclose details on their environmental and social sustainability. This is a significant change from the current threshold, which applies to firms with over 250 employees and a turnover of €40 million.
In addition, the EU plans to scrap its proposal to adopt sector-specific reporting standards by next June.
The document also details plans to postpone the EU’s due diligence law, known as the Corporate Sustainability Due Diligence Directive (CSDDD). Designed to ensure companies address human rights and environmental issues in their supply chains, the new proposal would limit in-depth assessments to direct business partners and subsidiaries, excluding other subcontractors and suppliers further along the chain.
