On February 26, 2025, the European Commission introduced two draft directives aimed at reducing corporate sustainability reporting and due diligence obligations. These reforms, part of the Omnibus I and II legislative package, propose amendments to the Corporate Sustainability Reporting Directive (CSRD – Directive (EU) 2022\/2464) and the Corporate Sustainability Due Diligence Directive (CS3D – Directive (EU) 2024\/1760), along with other key regulations such as the Carbon Border Adjustment Mechanism (CBAM) and the InvestEU program. The objective is to reduce the administrative burden on European companies while maintaining the EU\u2019s environmental ambitions. These adjustments could generate annual savings of \u20ac6.3 billion for affected businesses.<\/p>\n
The reform of sustainability reporting (CSRD) seeks to narrow the scope of application and simplify certain corporate obligations. Under the proposed changes, only companies employing more than 1,000 employees and with a turnover exceeding \u20ac50 million or a balance sheet exceeding \u20ac25 million would be subject to these reporting requirements. Additionally, sector-specific ESRS standards will be eliminated to reduce disclosure obligations.<\/p>\n
A voluntary sustainability reporting standard (VSME) will be introduced for SMEs not subject to CSRD, thereby limiting the reporting requirements for these smaller businesses. Moreover, the reform eliminates the requirement for reasonable assurance of sustainability information and replaces the limited assurance standards planned for 2026 with simplified guidelines. A two-year postponement of the reporting requirements\u2019 entry into force for certain companies is also proposed, allowing businesses in the second and third waves of implementation more time to adapt.<\/p>\n
Furthermore, a revision of ESRS standards is being considered to reduce the number of indicators, clarify the materiality principle, and simplify the structure and presentation of reporting standards.<\/p>\n
The due diligence reform (CS3D) focuses on simplifying requirements for large companies and their business partners. Under the new framework, in-depth assessments of value chains beyond direct business partners (Tier 1) will only be required if tangible elements indicate a proven risk. The frequency of evaluations will also be reduced, extending from every one year to every five years for comprehensive reviews.<\/p>\n
The due diligence process will be streamlined to ease compliance obligations and provide greater predictability for affected companies. Additionally:<\/p>\n
Moreover, the review clause on the inclusion of financial services within CS3D will be removed, and climate transition plans will need to align with CSRD requirements. The implementation timeline will also be adjusted as follows:<\/p>\n
These adjustments will have a significant impact on European companies. The narrower scope of application will relieve many large businesses from compliance burdens, while the introduction of a more flexible, voluntary framework will reduce mandatory reporting for SMEs. The postponement of deadlines will allow companies more time to adapt to the new requirements.<\/p>\n
Overall, these measures are expected to save European companies up to \u20ac6.3 billion per year while still aligning with the EU\u2019s sustainability objectives.
\nThe European Commission\u2019s proposals will now be reviewed by the European Parliament and the Council of the European Union, and further modifications may be made before final adoption. Our teams remain at your disposal to assist you in ensuring compliance with these new obligations.<\/p>\n","protected":false},"excerpt":{"rendered":"
On February 26, 2025, the European Commission introduced two draft directives aimed at reducing corporate sustainability reporting and due diligence obligations. These reforms, part of the Omnibus I and II […]<\/p>\n","protected":false},"author":2,"featured_media":564,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-573","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"yoast_head":"\n