Lawmakers in the European Parliament have reached a compromise deal on the EU’s major sustainability laws — including the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) — as part of the Omnibus I simplification package.

Lawmakers in the European Parliament have reached a compromise deal on the EU’s major sustainability laws — including the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) — as part of the Omnibus I simplification package.

What’s in the compromise

The deal, reached between the EPP, S&D, and Renew groups, introduces targeted adjustments to reduce administrative burdens while keeping the EU’s sustainability framework intact:

CSRD: The reporting scope will remain at 1,000 employees, but now also include a €450 million turnover threshold. This effectively narrows the number of companies required to report, compared with the current 250-employee threshold.
CSDDD: The due diligence law will apply only to companies with 5,000 employees and more than €1.5 billion in revenue. It will also move from an entity-based to a risk-based approach, focusing on direct business partners and the most material human rights and environmental risks.

Political balance

The compromise follows months of negotiation between parties with diverging priorities — some pushing for a strong sustainability agenda, others for a more pragmatic and competitiveness-oriented approach. The outcome is viewed as a political middle ground that ensures the legislative process can move forward before the end of the parliamentary term.

The agreement also aligns Parliament more closely with the Council’s position, which had already supported similar thresholds and the risk-based model.

Broader context: Omnibus I and the “simplification” agenda

The deal forms part of the broader Omnibus I package, proposed by the Commission in February 2025 under its simplification and competitiveness agenda. The initiative also reviews the EU Taxonomy, the Carbon Border Adjustment Mechanism (CBAM), and other green regulations to streamline compliance and reduce overlap.

This approach reflects the EU’s current shift from expanding new sustainability laws toward consolidating, harmonizing, and simplifying existing ones. For the CSRD, this trend is already visible in the revised ESRS drafts, which aim to cut up to 68 % of datapoints and make disclosure more proportionate for smaller and mid-sized firms.

What this means for companies

For most companies preparing under the CSRD, the direction is now clearer:

Reporting will remain mandatory, but in a more targeted and proportionate way.
The focus will increasingly shift to data quality, materiality, and digital interoperability rather than pure volume of disclosure.
Smaller companies outside CSRD scope will be encouraged to apply the VSME standard to stay connected to market expectations and supply-chain requirements.

Next steps

The compromise will be voted on in the Parliament’s Legal Affairs Committee before moving to a full plenary vote later this month. Once adopted, it will set the Parliament’s mandate for final negotiations with the EU Council.

For businesses, the message is clear: the EU’s sustainability framework remains in place — but with more focus on proportionality, efficiency, and alignment across regulations.

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