On 9 December 2025, the European Parliament and the Council of the EU reached a provisional deal on the draft Omnibus Directive simplifying sustainability reporting and due diligence requirements for companies. The informal agreement simplifies the directives on corporate sustainability reporting and corporate sustainability due diligence by reducing the reporting burden and limiting the trickle-down effect of obligations on smaller companies.

Key points

The press release notes that according to the informal agreement:

  • Social and environmental reporting will 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.
  • Reporting requirements have been further simplified and become more quantitative, while sector-specific reporting will become voluntary. Smaller companies with under 1,000 employees are protected from shifting responsibility for reporting, as the updated rules allow them to refuse reporting information beyond what is set out in the voluntary standards.
  • 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 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.
  • Businesses within the scope of the revised due diligence rules will no longer need to prepare a transition plan to make their business model compatible with the Paris Agreement. They will remain liable at national rather than EU level for non-compliance and could face fines of up to 3% of the company’s net worldwide turnover, the guidance on which will be provided by the Commission and member states.

Finally, the provisional agreement postpones the Corporate Sustainability Due Diligence Directive’s transposition deadline by another year, to 26 July 2028. Companies will have to comply with the new measures by July 2029.

Next steps

The provisional agreement must be now endorsed by the Council and the European Parliament. before it is formally adopted by the two institutions.