EU Narrows Its Sustainability Reporting Rules to Companies With 1,000 Staff and €450 Million Turnover

Negotiators for the Council of the EU and the European Parliament reached a provisional political agreement in early December 2025 on the first omnibus simplification package, known as Omnibus I. The deal substantially narrows the scope of two flagship sustainability laws: the Corporate Sustainability Reporting Directive, or CSRD, and the Corporate Sustainability Due Diligence Directive, or CSDDD. Under the agreement, as summarised by law firms including Linklaters and A&O Shearman, the CSRD will apply to companies with more than 1,000 employees and net annual turnover above €450 million.

The CSRD, adopted in 2022, requires companies in scope to report detailed information on sustainability matters according to European Sustainability Reporting Standards. The original scope covered around 50,000 companies, including large unlisted companies and listed SMEs. The CSDDD requires companies to identify, prevent and address adverse human rights and environmental impacts in their operations and value chains. Energy companies, utilities and large energy users are among those that remain in scope under the new thresholds.

For data centre operators, many of which are large multinationals, CSRD reporting will continue for the biggest players. The CSRD and CSDDD also apply to non-EU companies with significant EU turnover. For investors, narrower scope means less standardised data on smaller companies, though large companies, which account for most emissions, remain covered. The changes have been welcomed by business groups as reducing costs and administrative burden, and criticised by some investor groups and civil society organisations as weakening transparency.

Transition plans have been one of the most debated parts of both directives. With the obligations softened and focused on fewer companies, the number of standardised transition plans published in the EU will be lower than first expected. The CSRD also introduced mandatory limited assurance of sustainability information by auditors, with a possible move to reasonable assurance later. The provisional agreement must be formally adopted by the Parliament and the Council.