On 16 December 2025, the European Parliament (EP) approved a provisional agreement to simplify and reduce the scope of sustainability reporting and due diligence requirements for companies. This approval concludes the ‘Omnibus I’ released as a set of proposed changes to simplify sustainability and due diligence reporting by the European Commission (EC) in February 2025.
Key highlights of the agreement
Simplified sustainability reporting and reduction in scope- Only EU companies with over 1,000 employees on average and a net annual turnover exceeding €450 million will be required to report on sustainability.
- The same turnover threshold, i.e. €450 million generated within the EU, will apply for non-EU companies and to their subsidiaries and branches generating net annual turnover over €200 million within the EU.
- Sector-specific reporting will be voluntary.
- Smaller companies with under 1,000 employees will be protected from being required to provide additional data beyond the voluntary set of sustainability reporting standards.
- The EC will launch a digital portal offering templates and guidelines on EU and national reporting requirements.
Corporate due diligence
- Due diligence obligations will apply only to EU companies with over 5,000 employees and a net annual turnover above €1.5 billion.
- The same turnover threshold for due diligence requirements, i.e. €1.5 billion generated within the EU, will apply for non-EU companies.
- Companies will be required to adopt a risk-based approach across their value chains and should request information from partners with less than 5,000 employees only when it cannot be obtained through other means.
- Transition plans aligned with the Paris Agreement will no longer be mandatory.
- Non-compliance with due diligence requirements will result in national-level rather than EU level penalties, with non-compliance fines of up to 3% of the company’s net global turnover.
- The directive on due diligence will come into effect on 26 July 2029 for all businesses covered by its scope.
The final text awaits formal approval from Council of the European Union and will enter into force 20 days after publication in the EU Official Journal.