Parliament and member state negotiators have reached a provisional agreement to update the European Union’s rules on sustainability reporting and due diligence for companies. The deal, part of the Omnibus I package, aims to simplify existing requirements and reduce administrative burdens for businesses.
Under the new arrangement, only EU companies with more than 1,000 employees and an annual net turnover exceeding €450 million will be required to provide social and environmental reports. For non-EU companies, the threshold is set at €450 million in net turnover generated within the EU. The updated rules also make sector-specific reporting voluntary and ensure that smaller companies with fewer than 1,000 employees are not compelled to provide information beyond voluntary standards.
The agreement includes plans for the European Commission to establish a digital portal offering templates and guidelines on both EU and national reporting requirements.
Regarding due diligence obligations, only large corporations—those with over 5,000 employees and a net annual turnover above €1.5 billion—will need to conduct due diligence aimed at minimizing negative impacts on people and the environment. These rules will also apply to non-EU corporations operating above this threshold within the EU. Companies must use a risk-based approach in their operations but are not required to collect unnecessary information from entities outside the scope of these regulations.
Firms covered by these revised due diligence rules will no longer be obligated to prepare transition plans aligning their business models with the Paris Agreement. Enforcement will occur at the national level rather than across the EU as a whole, with potential fines reaching up to 3% of global net turnover for non-compliance.
Rapporteur Jörgen Warborn (EPP, SE) stated: “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.”
The Legal Affairs Committee is scheduled to vote on this provisional agreement on December 11, 2025. A plenary vote in Parliament will follow later in December during its session in Strasbourg. A press conference regarding these developments is planned for December 9.
These changes follow delays in applying previous sustainability reporting and due diligence obligations. The current proposal seeks specifically to lessen administrative demands on companies as part of broader simplification efforts introduced by the European Commission earlier this year.
