- within Environment, Real Estate and Construction and Insolvency/Bankruptcy/Re-Structuring topic(s)
- with readers working within the Insurance industries
On 13 November, the European Parliament (EP) adopted its negotiating position on the sustainability Omnibus package.
The EP's position is closely aligned with the Council on key areas. Both the EP and the Council want to significantly reduce the number of companies falling within the scope of CSRD and CSDDD to include only very large companies but the EP goes further on some points by raising the threshold for determining the scope of CSRD and it seeks to further reduce due diligence requirements under CSDDD.
2026 looks set to see a very high percentage of Irish, EU and non-EU companies being taken out of scope of the CSRD and CSDDD
The following are some of the key points from the EP's adopted position:
1. Corporate Sustainability Reporting Directive (CSRD)
- Scope – only very large companies are to come within scope of CSRD. the EP wants to increase the employee threshold to 1750 employees (compared to the Council's position of 1000) and wants a turnover threshold of €450 million (in line with the Council's position).
- ESRS – reporting standards to be simplified and number of data points to be substantially reduced. Sector specific reporting to be voluntary not mandatory (in line with Council's position).
- Value Chain information – smaller companies to be protected from burdensome data requests. Companies reporting under CSRD would not be permitted to request information beyond the voluntary standards from companies that are not within the scope of CSRD.
2. Corporate Sustainability Due Diligence Directive (CSDDD)
- Scope – again only very large companies to come within scope of CSDDD. The EP wants an employee threshold of 5000 employees and a turnover threshold of €1.5bn (in line with the Council's position)
- Due Diligence – the EP has voted for a "risk-based approach" with companies focussing on their own operations and their largest business partners (more limited duties to the position taken by Council)
- Civil liability – companies is breach of CSDDD would be liable at national level and not EU level (in line with the Commission's and Council's approach)
- Transition plans – delete mandatory transition plans completely (Council proposes to maintain these with some reliefs)
The following tables provide a quick summary of the positions adopted to-date by the Commission, Council and EP on the Omnibus amendments to CSRD and CSDDD
CSRD – Position taken on Omnibus Amendments
| Companies/ Groups | EU Commission – Feb 2025 | Council – June 2025 | European Parliament - Nov 2025 |
|---|---|---|---|
| Average number of Employees | More than 1000 | More than 1000 | More than 1750 |
| Net Turnover/ Balance Sheet Total | Either a balance sheet total over €25m or a net turnover of over €50m | A net turnover over €450m | A net turnover over €450m |
The above figures apply to individual entities (on a standalone basis) and to parent companies of groups (on a consolidated basis).
With these increased thresholds, it is predicted that over 80% of companies currently falling within the scope of the CSRD will be taken out of scope when the amendments have been agreed. This will include all SMEs regulated on an EU regulated market and which were originally intended to come within scope as "wave 3" companies for reporting in 2029 (on FY 2028 results). It will also take many of the "large" companies out of scope which were originally intended to come within scope as "wave 2" companies for reporting in 2028 (on FY 2027 results).
CSDDD – Position taken on Omnibus Amendments – EU Companies
| Companies/ Groups | EU Commission – Feb 2025 | Council – June 2025 | European Parliament - Nov 2025 |
|---|---|---|---|
| Average number of Employees | More than 1000 | More than 5000 | More than 5000 |
| Net Turnover generated globally | A net turnover over €450m | A net turnover over €1.5b | A net turnover over €1.5b |
CSDDD – Position taken on Omnibus Amendments – Non-EU Companies
| Companies/ Groups | EU Commission – Feb 2025 | Council – June 2025 | European Parliament -Nov 2025 |
|---|---|---|---|
| Average number of Employees | N/A | N/A | N/A |
| Net Turnover generated in the EU | A net turnover over €450m | A net turnover over €1.5b | A net turnover over €1.5b |
Next stage of the legislative process
The next stage of the legislative process is the trilogue negotiations between the EP, Council and Commission which are expected to commence this week. The aim is to finalise the legislation before the end of December 2025. Given the differences in the co-legislators' positions on some of the key issues, and with only 6 weeks to the year end, this is an ambitious deadline.
What's in store for 2026?
One thing looks clearer for 2026 – the CSRD and CSDDD, when amended, will apply to a much smaller number of companies. It is anticipated that over 80% of companies previously in-scope will be taken out of scope for mandatory corporate sustainability reporting under CSRD and a significant percentage of companies/groups will also be taken out of scope for the due diligence obligations under CSDDD.
To read the European Parliament Press Release, click here.
For a link to the amendments adopted by the European Parliament, click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
