Following months of industry pressure, the European Parliament and Council clinched a compromise on Tuesday morning to reduce corporate sustainability and reporting requirements, after more than seven hours of negotiations.
The agreement goes further than what the Commission had proposed in easing reporting obligations for companies, though it stops short of the sweeping rollback that a right-wing majority agreed to in Parliament last month.
Jörgen Warborn, the EPP negotiator steering talks for Parliament, hailed the outcome. “We are actually delivering on the Green Deal. Before, there was green but no deal,” he said. “This is a win for competitiveness and a win for Europe.”
His key ally on the file, Pascale Piera of the far-right Patriots of Europe group, offered a very different reading, framing the agreement as a deathblow to the Green Deal. By scrapping requirements for companies to adopt climate transition plans, “we succeeded in bringing down what was essentially the key symbol of the Green Deal, and this is inevitably a boost for the economy,” she told Euractiv.
Amid pressure from business lobbyists, the Commission had proposed a partial rollback as part of its first “omnibus” package. But in a taboo-breaking shift, the centre-right European People’s Party joined forces with the far right to demand a far narrower scope.
More corporate, less sustainability
EU rules adopted last year require large companies to carry out human rights and environmental due diligence across their operations and value chains under the Corporate Sustainability Due Diligence Directive (CSDDD). In parallel, the Corporate Sustainability Reporting Directive (CSRD) obliges large and listed firms to disclose detailed information about their environmental, social, and governance impacts, including their climate strategy and transition plans.
Under the provisional agreement, social and environmental reporting will apply only to EU companies with more than 1,000 employees and annual net turnover above €450 million – compared with the €50 million threshold initially proposed by the Commission. The Danish EU Council presidency estimates that the revised thresholds exempt more than 85% of firms that would otherwise fall under the CSRD.
On due diligence, the threshold has been lifted sharply. Instead of applying to companies with more than 1,000 employees and turnover of at least €450 million, the obligation will now cover only those with over 5,000 staff and annual revenue above €1.5 billion.
In line with Parliament’s position, the new reporting regime also drops mandatory climate transition plans entirely.
The European Parliament is expected to formalise the deal in a vote next Tuesday, with EU ambassadors set to review and take a decision on the file later this week.
(cz)
