The European Commission intends to reduce the number of companies subject to EU sustainability reporting requirements, aiming to streamline regulations for businesses, according to a draft document reviewed by Reuters.
Next week, Brussels is set to introduce an “omnibus” proposal designed to simplify green regulations for businesses, with the goal of enhancing local industry competitiveness and responding to former US President Donald Trump’s call to eliminate regulations.
Member countries within the EU, including Germany and France, are advocating for a relaxation of the green reporting rules, while others, such as Spain, emphasize the importance of these regulations in upholding the EU’s commitments to environmental and human rights standards.
A preliminary version of the forthcoming proposals, obtained by Reuters, indicates that the Commission plans to amend the EU’s corporate sustainability reporting directive, which mandates companies to disclose details about their environmental and social sustainability practices.
According to the draft proposal, which may still be revised prior to publication, only firms with over 1,000 employees and a net turnover exceeding 450 million euros ($471 million) will be obligated to comply with these rules.
Currently, the regulations apply to companies with more than 250 employees and a turnover of at least 40 million euros. Additionally, the EU plans to abandon its intention to implement sector-specific reporting standards by next June, as stated in the draft.
The document also outlines plans to postpone the EU’s due diligence law, known as the CSDDD, which aims to compel companies to identify and address human rights and environmental issues within their supply chains by imposing due diligence responsibilities on large corporations.
The draft proposal stipulates that companies would only need to conduct thorough assessments of their direct business partners and subsidiaries, excluding other subcontractors and suppliers from their supply chain evaluations.
By Kate Abnett; Editing by Emelia Sithole-Matarise
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