Council agrees position on sustainability reporting and due diligence requirements
On 23 June 2025 member states agreed the Council’s negotiating mandate on the European Commission’s proposal of simplifying the directive on corporate sustainability reporting (CSRD) and the directive on corporate sustainability due diligence (CS3D). The proposal forms part of the "Omnibus I” package, which aims at improving EU’s competitiveness by cutting red tape and reducing administrative burden on smaller companies.
On the CSRD, the Commission proposed to increase the employee threshold to 1000 employees and to remove listed SMEs from its scope. The Council added a net turnover threshold of €450 million and introduced a review clause on a possible extension of the scope.
On the CS3D, the Council increased the scope’s thresholds to 5000 employees and to €1.5 billion net turnover. The mandate also changes the focus of the due diligence requirements to a risk-based approach. Companies should no longer be required to develop a comprehensive mapping exercise but only conduct a more general scoping exercise instead. On transition plans, the obligation for companies to the adoption of a plan is limited and supervisory authorities are empowered to advise companies on design and implementations. The obligation to adopt transition plans has been postponed by two years. Finally, the Council maintains the Commission’s proposal to remove an EU harmonised liability regime.
Next steps:
- The Council can start negotiating with the European Parliament once the latter has reached a negotiating position
- CS3D’s transposition by member states deadline is postponed to 26 July 2028.
For more information:
Note bene: the Council general approach full text is at this stage still not available