Omnibus 1: simplifying rules while preserving sustainable obligations

Today, the European Parliament endorsed the trilogue agreement revising EU rules on sustainable corporate reporting and due diligence. The final outcome strikes a balanced compromise, combining simplification with the preservation of the core objectives of EU sustainability legislation.

The Corporate Sustainability Reporting Directive (CSRD) will apply to fewer companies, but still between 5,100 and 7,800 firms—enough to underpin a credible capital markets union. These companies will have to collect less data (60–70% fewer data points) and focus on information that matters to investors. The double materiality principle is preserved and the data will remain robust. It will still be verified by auditors but they will follow more flexible guidelines to help reduce audit costs. Smaller companies that fall outside the scope of the CSRD but trade with companies that are in scope will be protected from receiving an avalanche of questionnaires. Information requests will have to be targeted, proportionate, and relevant, ensuring that meaningful data continues to flow.

The Corporate Sustainability Due Diligence Directive (CSDDD) will also apply to fewer companies (just under 1,000). These companies will be required to assess the risks of human rights violations and environmental pollution across their value chains in a smarter way. They will no longer have to exhaustively map their activities but instead apply a “smell test” and act where real risks arise. This approach makes EU due diligence practical and effective, rather than a mere box-ticking exercise. The agreement closes the door to loopholes: when violations are identified, companies must act—no ifs, no buts.

Both directives apply to EU and non-EU companies operating in the single market.