The European Parliament has approved an agreement with member states to narrow the scope of EU sustainability reporting and supply-chain due diligence rules, with new thresholds focusing obligations on larger firms and due diligence requirements delayed until July 2029.
The European Parliament has adopted a deal with EU member states to revise the bloc’s rules on corporate sustainability reporting and corporate due diligence, as part of a wider “Omnibus I” effort to simplify regulation and reduce administrative burden on businesses.
According to the Parliament press release, the updated sustainability reporting requirements will apply to EU companies with more than 1,000 employees and net annual turnover above €450 million. The same reporting threshold will also apply to non-EU companies generating more than €450 million in EU net sales, alongside rules covering certain EU subsidiaries and branches above a €200 million EU sales threshold.
Parliament said the revised framework is designed to prevent “trickle-down” reporting demands onto smaller firms. Under the new approach, companies below 1,000 employees are protected from having reporting responsibilities shifted onto them by larger business partners, and voluntary standards will set limits on what information may be requested from smaller counterparts. Parliament also said the European Commission will establish a digital portal providing templates and guidance on EU and member state reporting obligations.
Corporate due diligence
On corporate due diligence, the agreement narrows obligations further. Parliament said due diligence duties will apply only to the largest companies — those with more than 5,000 employees and net annual turnover above €1.5 billion — as well as non-EU companies meeting the same turnover threshold in the EU. Under the revised rules, in-scope companies must identify and assess supply-chain risks and may only request information from business partners below the 5,000-employee threshold where necessary for a thorough assessment.
Parliament also said that transition plans to align business models with the shift to a sustainable economy will no longer be mandatory under the due diligence regime, and that penalties may reach up to 3% of global net revenue, with liability handled at national level. The due diligence rules are due to apply from 26 July 2029.
The agreement was adopted in Parliament by 428 votes to 218, with 17 abstentions. The text now requires formal approval by the Council, and would enter into force 20 days after publication in the EU’s Official Journal.
Jörgen Warborn (EPP, Sweden), rapporteur in Parliament’s Legal Affairs Committee, said the vote reflected concerns from employers and framed the changes as a first step in simplifying EU rules while maintaining sustainability objectives.