EU deal on simplifying sustainability rules
The European Parliament and EU Council have reached agreement on a proposal from the European Commission aimed at reducing the impact of sustainability rules on businesses.
The commission has welcomed the deal on the so-called ‘Omnibus I’ package, which includes changes to the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD).
The proposed measures reduce the scope of the CSRD and remove what the commission describes as “unnecessary complexities” from the CSDDD.
Thresholds
The European Parliament said that, under the deal with EU governments, reporting under the CSRD would now 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.
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 under the CSDDD 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.
‘Stop the clock’
The provisional agreement must now be formally approved by both the European Parliament and the EU Council.
The amendments will then be published in the Official Journal of the European Union and will become effective on the day of their publication.
In April, EU governments adopted a ‘stop-the-clock' mechanism that postponed by two years the entry into application of the CSRD requirements for large companies that had not yet started reporting, as well as listed SMEs.
The mechanism also postponed by one year the transposition deadline and the first phase of the application (covering the largest companies) of the CSDDD.