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Posted: December 9, 2025
EU lawmakers have reached a provisional deal to delay, simplify and significantly narrow the scope of the CSRD and CSDDD. The agreement reduces the number of companies required to report, removes transition plan obligations and revises liability rules while setting up future reviews that could expand the regulations again.
Lawmakers in the European Parliament and Council have reached a provisional deal to simplify and delay key sustainability regulations, including the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive. The agreement would sharply reduce the number of companies covered, although the reduction is not as large as some earlier proposals suggested. It also introduces review clauses that could widen the scope in the future, highlighting ongoing debate over the direction of EU sustainability regulation.
The agreement confirms new thresholds for reporting and due diligence obligations. For the CSRD, only companies with at least 1,000 employees and 450 million euros in revenue would fall under the scope, with listed SMEs and financial holding firms excluded. For the CSDDD, both bodies backed a threshold of 5,000 employees and 1.5 billion euros in revenue, removing most companies from the rules. Lawmakers also set new criteria for non-EU companies operating in the European market. Additional updates include a risk-based approach for identifying impacts in the CSDDD, the removal of required climate transition plans, and the elimination of an EU-wide liability regime. Companies will now face national-level liability instead and a reduced penalty cap of 3 percent of global revenue.
The changes aim to reduce administrative pressure while allowing regulators to revisit the rules later. Supporters say the deal will help businesses focus on growth and green investment, while critics argue that early reviews create uncertainty and slow progress on environmental and human rights protections. The agreement still needs approval from both the Parliament and Council before being formally adopted, making this a key moment in the ongoing evolution of EU sustainability regulation.
