The EU is taking decisive steps to reduce the burden of climate reporting on businesses. A majority in the European Parliament has voted to roll back environmental reporting requirements even further than the measures proposed by the European Commission in early 2025.

In February 2025, the Commission (the EU’s executive body) responded to a request from the bloc’s heads of state to ease environmental reporting requirements. The Commission’s Omnibus I proposals aimed to simplify sustainability regulations and streamline aspects of the following legislation (see EU climate reporting: simplification is not simple):

• The Corporate Sustainability Reporting Directive (CSRD). This legislation requires companies to provide annual reports covering areas such as operational and supply chain greenhouse gas (GHG) emissions, carbon reduction plans, physical and business climate risks, water usage, waste generation and social impacts.
• The Corporate Sustainability Due Diligence Directive (CSDDD). This legislation requires companies to identify and mitigate adverse impacts on human rights and the environment in their supply chain, including IT hardware sourcing and responsible e-waste disposal. Non-compliance can result in fines of up to 5% of a company’s annual turnover.

The Omnibus I proposals raised reporting thresholds to exempt smaller organizations from compliance.

New thresholds

In November 2025, the European Parliament voted to raise these thresholds even higher, removing more companies from reporting obligations and eliminating the CSDDD’s requirement for a climate transition plan to align with the Paris Agreement terms (Table 1).

Table 1 CSRD and CSDDD reporting: Omnibus I proposal versus new European Parliament agreement

The European Parliament agreement would also simplify CSDDD reporting standards, requiring fewer qualitative details and sector-specific reporting becoming voluntary.

Under the new proposals, the CSDDD would no longer require larger companies to demand sustainability information from smaller companies in their supply chain. Instead of systematically requesting information from smaller business partners, the European Parliament wants businesses to rely on publicly available information and only request clarification from the company as a last resort. Large companies may not request information from companies below the threshold, except for what those companies disclose under voluntary standards.

The CSDDD would also no longer require companies to prepare a transition plan to demonstrate that their GHG emissions reduction plan is compatible with the Paris Agreement. Legislators note that transition plan obligations remain in other directives, including the CSRD.

The November 2025 agreement does not mention any change to the potential for fines of up to 5% of a company’s annual turnover under the CSDDD, which has been criticized by both US and Qatari organizations.

Uptime Intelligence understands that the European Parliament’s position is intended to remove ambiguities for non-EU organizations that fall under the Omnibus I requirements, but the full parliamentary text is not currently available.

Next steps

The European People’s Party (EPP) reports that the European Parliament’s new position removes a €4.7 billion regulatory cost to business that has hindered European companies from competing against their competitors in other locations. The EPP and business groups say that supply chain reporting requirement is a burdensome accounting effort that demands substantial resources and expense, while offering minimal, if any, actionable information.

The next step is to negotiate a final agreement with the European Council. This needs to be completed by the end of 2025, a deadline created by the time-limited “stop the clock” measure introduced in the Omnibus I proposal.

If this deadline is met, many companies that expected to fall under the CSDDD reporting requirements can now be reasonably confident to avoid them. The simplification of the reporting requirement was opposed by left-wing and green politicians, who now have limited ability to influence the final agreement.

Uptime Institute recommends that operators with the relevant number of employees and revenue to fall under previous CSDDD versions should remain alert. The EU Parliament has swiftly revised a complex set of amendments across multiple directives. The final text still carries the risk of unintended consequences.

Operators should also note that the original Omnibus I proposal came too late to prevent the first wave of 2025 reporting under the original CSRD.

Other related reports published by Uptime Institute include:
EU climate reporting: simplification is not simple
Should operators continue to prepare for climate risk reporting?