Sustainability reporting and due diligence rules updated

• Companies with more than 1,000 employees and annual turnover higher than €450 million to report on their sustainability
• Only large corporations with more than 5,000 employees and annual turnover higher than over €1.5 billion to carry out due diligence on their adverse impacts
• Digital portal with templates and guidelines on reporting requirements for businesses

Parliament and member state negotiators reached a provisional deal to update EU rules on sustainability reporting and due diligence requirements for companies.

On Tuesday, Legal Affairs Committee MEPs and the Council agreed to reduce sustainability reporting and due diligence requirements for companies, a proposal that forms part of the so-called Omnibus package.

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.

Co-legislators also agreed on further simplification of the reporting requirements which should become more quantitative, while sector-specific reporting would become voluntary. They ensured 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.

MEPs made sure that the Commission will create a digital portal for businesses with access to templates and guidelines on EU and national reporting requirements.

Due diligence only for large corporations

According to the agreement, 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. Companies should adopt a risk-based approach in their chain of activities and should refrain from requiring unnecessary information from companies not included in the scope.

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.

“We have secured a very good compromise. We are making the sustainability rules easier to comply with, delivering historic cost reductions for businesses, and still delivering for European citizens. This is a win for competitiveness and a win for Europe.”
Rapporteur Jörgen Warborn (EPP, SE)

The Legal Affairs Committee will vote on the provisional agreement on 11 December 2025. Parliament as a whole will vote on it during its plenary session in December in Strasbourg.

Previous details about Omnibus, here.

Watch the press conference here.