The European Parliament agreed on major changes to EU sustainability reporting and corporate due diligence rules, reducing administrative burdens for large companies while maintaining oversight of the continent’s largest firms. In Thursday’s vote, 382 MEPs backed the measures, 249 opposed them, and 13 abstained, setting Parliament’s negotiating position ahead of discussions with member states.
Under the new framework, only companies with more than 1,750 employees and a net annual turnover above €450m must produce social and environmental reports. Firms in this category must also follow EU taxonomy rules for sustainability reporting, though sector-specific reporting remains optional. The revisions aim to prevent smaller companies from providing more information than the voluntary standards specify.
Due diligence to affect only the biggest
Corporate due diligence obligations now apply only to companies with over 5,000 employees and a turnover exceeding €1.5bn. These firms must adopt a risk-based approach, focus on known impacts, and consult smaller partners only when strictly necessary. The rules remove the requirement to produce transition plans aligned with the Paris Agreement, and national authorities, rather than the EU, handle liability for non-compliance. Companies that fail to meet obligations must compensate victims for any harm caused.
To assist businesses in meeting their obligations, MEPs proposed a digital portal that provides free access to templates, guidance, and information on EU reporting rules, complementing the European Single Access Point.
Jörgen Warborn, rapporteur for the Legal Affairs Committee, said: “Today’s vote shows that Europe can be both sustainable and competitive. We are simplifying rules, cutting costs, and giving businesses the clarity they need to grow, invest, and create well-paying jobs.”
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Delays and dilution?
The changes follow delays in implementing sustainability reporting and due diligence requirements, which the Commission first introduced in its Omnibus I package in February 2025. Some observers warned that the earlier proposals could overburden companies or weaken safeguards. Parliament’s adjustments—raising thresholds, making sector-specific reporting voluntary, and shifting liability to the national level—reflect an effort to balance competitiveness with accountability.
Negotiations with EU governments will begin on 18 November, with the aim of finalising the legislation by the end of 2025. Stakeholders will watch closely to see whether the final agreement achieves meaningful oversight while easing administrative requirements for large companies.
