The European Commission is set to unveil new proposals aimed at reducing the regulatory burden on companies regarding sustainability reporting. The proposed changes are part of the EU’s broader strategy to cut red tape for businesses, enhance competitiveness, and respond to external pressures.
Under the current Corporate Sustainability Reporting Directive (CSRD), companies with more than 250 employees and a turnover exceeding 40 million euros are required to disclose their environmental and social sustainability information. However, the draft proposal, seen by Reuters, indicates that the threshold will be raised to companies with over 1,000 employees and a net turnover exceeding 450 million euros.
Additionally, the EU plans to cancel its sector-specific reporting standards, previously scheduled for adoption by next June, and delay the implementation of the Corporate Sustainability Due Diligence Directive (CSDDD). The CSDDD requires companies to identify and address human rights and environmental issues within their supply chains. The new proposal suggests that companies will only need to conduct in-depth assessments of their direct business partners and subsidiaries, excluding other subcontractors and suppliers.
These proposed changes have sparked a debate among EU member countries. While Germany and France advocate for loosening the green reporting rules to boost industrial competitiveness, Spain and others argue that these regulations are vital for upholding the EU’s core values on environmental protection and human rights.
The upcoming proposals will be officially published next week, and the final details may still change. However, the draft provides a clear indication of the EU’s intent to simplify and streamline its sustainability reporting requirements for businesses.