EU Parliament Approves Omnibus Agreement to Cut Sustainability Reporting and Due Diligence Requirements – ESG Today

>While retaining the initial proposal’s 1,000 employee cutoff for the CSRD, the agreement added a new threshold excluding companies with less than €450 million in annual revenues from being included in the regulation, removing an estimated 90% of companies from the sustainability reporting requirements.

>The cuts to the CSDDD were even more drastic, with the co-legislators agreeing to raise the threshold for the sustainability due diligence regulation to 5,000 employees and €1.5 billion in revenue, removing the vast majority of companies.

>Notably, the agreement includes review clauses for the CSRD and CSDDD, concerning a possible extension of the scope for both regulations.

>In addition to reducing the number of companies covered by the CSRD and CSDDD, the agreement made additional changes to the current regulations, and to the Commission’s proposals, including removing the CSDDD’s obligation for companies to prepare climate transition plans. The agreement also eliminated the regulation’s EU-wide liability regime, and also lowered potential penalties under the regulation to a maximum cap of 3% of global revenues.