Sustainability reporting: Rapporteur proposes further cuts to scope

A drafted amendment by the European Parliament’s Economic and Monetary Affairs (ECON) Committee proposes a significant scale back in the scope of the EU’s sustainability reporting and due diligence legislation.

The draft even goes beyond the European Commission’s February Omnibus I simplification proposal.

The draft amendments have been proposed by Rapporteur Janusz Lewandowski who is responsible for coordinating the ECON Committee’s opinion on the file.

Raising the applicability threshold

MEP Lewandowski proposes to raise the applicability threshold for both the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) to companies with more than 3,000 employees and €450 million in turnover.

This would further reduce the number of companies subject to these rules, removing a substantial share of firms from compliance obligations.

The original European Commission draft had proposed limiting the CSRD to companies with over 1,000 employees and €50 million in turnover.

The draft opinion also calls for strict caps on the number of mandatory data points under the European Sustainability Reporting Standards (ESRS), limiting them to 100, with 50 voluntary points.

Additionally, it removes the CSDDD’s requirement for companies to adopt climate transition plans – arguing this is already covered under the CSRD.

Reaching negotiating positions

This proposal represents the opinion of the ECON Rapporteur, which will need to be negotiated with other Committee members.

Given the growing focus on competitiveness and streamlining bureaucratic requirements for companies, the ECON Committee’s position is expected to carry significant weight.

In the coming weeks, the Committee on Legal Affairs (JURI), which is leading the Parliament’s position on the file, will come forward with its position.

Once a position across Committees is found, it will need to be approved in Plenary before it becomes the Parliament’s official negotiating position in forthcoming negotiations with the Council of the EU.

In parallel, the Council is working on its position. Member States largely agree with the Commission’s proposal on CSRD scope. On CSDDD, however, Germany and France’s governments are calling to completely scrap all obligations, while Denmark is strongly rejecting Germany and France’s approach.

Given the divergencies, both in the Council and Parliament, it will take several weeks before both institutions reach internal positions, which can then serve as a basis for common negotiations.

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