In April 2025, both the European Parliament and the Council of the EU adopted the ‘stop-the-clock’ directive of the Omnibus package focusing on postponing the application timelines of key sustainability directives.
Streamlining EU regulations continues to be a central focus for the European Parliament, with the ‘content’ directive of the Omnibus package steadily advancing through the legislative process.
On 13 October 2025, the European Parliament’s Legal Affairs Committee voted in favour of a new legislative package aimed at simplifying sustainability reporting and due diligence obligations for companies operating within the EU, which are part of the European Commission’s broader ‘Omnibus I’ simplification initiative.
If the European Parliament endorses the committee’s position during the upcoming plenary session, negotiations with EU governments on the final legislative text are expected to begin on 24 October 2025.
Key draft amendments and simplifications
The new draft requirements published by the European Parliament include:
Simplified sustainability reporting
- Fewer companies affected:
The revised rules would significantly reduce the number of companies required to report on sustainability. Only companies with more than 1,000 employees and a net annual turnover exceeding €450 million would be subject to mandatory sustainability reporting as well as to sustainability reporting under taxonomy rules. - Voluntary reporting for smaller firms:
Companies falling outside the new thresholds would no longer be obligated to report, though they may do so voluntarily following Commission guidelines. Importantly, larger companies would be prohibited from requesting information beyond the voluntary standards, setting a ‘cap’ on data requirements. - Simplified reporting standards:
The proposal emphasises a streamlined approach, focusing on quantitative data. Sector-specific reporting would become optional. - Digital one-stop-shop:
A new EU digital portal would be created to provide companies with free access to templates, guidelines, and comprehensive information on reporting requirements. This platform will complement the European Single Access Point.
Revised due diligence requirements
- Scope limited to large enterprises:
Due diligence obligations, meant to ensure companies mitigate adverse impacts on human rights and the environment, would apply only to EU companies with over 5,000 employees and over €1.5 billion in a net annual turnover, as well as non-EU companies with equivalent turnover within the EU. - Risk-based approach:
Instead of blanket data collection from business partners, companies would adopt a risk-based model, requesting information only when adverse impact is likely. For companies outside the scope, such requests would be permitted only as a last resort. - Transition plans:
Companies would still be required to develop the transition plans to align with sustainable economy and the objectives of the Paris Agreement. - No EU-level civil liability:
While companies would still be liable for damages under national laws, the EU would not impose civil liability at the European Union level. Fines for non-compliance could reach up to 5% of a company’s global turnover.
For more information, refer to the press release from the European Parliament.