The European Parliament adopted its Omnibus I position, sharply narrowing the scope of CSRD and CSDDD to only very large companies. The package includes simplified reporting, voluntary sector ESRS, a risk-based due-diligence approach, removal of the climate transition plan, and national enforcement. Trilogue negotiations will begin in November 2025 to finalise the legislation.
The European Parliament has adopted its negotiating mandate on the Omnibus I package, agreeing to substantial changes that would significantly reduce the number of companies subject to EU sustainability reporting and due-diligence rules. This move provides substantial relief from the compliance burden for thousands of firms.
CSRD – Scope Changes
Under the Parliament’s position, the Corporate Sustainability Reporting Directive (CSRD) would apply only to companies that meet both of the following criteria:
- More than 1,750 employees on average.
- Annual net turnover above €450 million.
Compliance Implications:
- Only companies meeting these thresholds would be required to prepare mandatory sustainability statements, including reporting under the EU Taxonomy.
- Simplified Reporting: Reporting standards would be simplified, requiring fewer qualitative disclosures.
- Sector-Specific Standards: Sector-specific European Sustainability Reporting Standards (ESRS) would become voluntary.
- SME Protection: Large companies would be limited in how much sustainability data they can demand from smaller business partners, restricting the "trickle-down" burden.
CSDDD – Scope Changes
The Corporate Sustainability Due Diligence Directive (CSDDD) would be limited to companies that meet both of the following thresholds:
- More than 5,000 employees.
- Net worldwide turnover of at least €1.5 billion.
Compliance Implications:
- These companies would be required to apply a risk-based approach for identifying and mitigating negative environmental and human-rights impacts.
- Firms must rely first on existing information and only request further data from smaller partners when strictly necessary (last-resort principle).
- Crucially, the Parliament’s position removes the requirement to prepare a Paris-Agreement-aligned transition plan.
- Enforcement and compensation would shift to national frameworks (see below).
Additional Simplification & Enforcement Measures
In addition to the primary scope changes, the MEPs’ adopted position includes several further measures:
- National Liability and Penalties: Non-compliance with due diligence obligations would lead to sanctions and penalties enforced by Member States.
- Victim Compensation: Companies could be held liable to fully compensate victims for damages under national law (removing the initial proposal for EU-level civil liability).
- Official Guidance: The Commission and Member States would be tasked with providing clear guidance on how to implement due diligence under the new rules.
- Digital Portal for Businesses: A new EU portal would be created, offering free access to templates, guidelines, and all EU reporting requirements, complementing the European Single Access Point (ESAP).
Next Steps
Trilogue negotiations between the Parliament, the Council (Member States), and the Commission begin 18 November 2025, with the aim of finalising the legislation by the end of 2025.
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