The EU’s plan to reduce the burden of climate reporting has been revised again. A deal between the European Commission (the executive body) and member states has reduced the employee threshold for the Corporate Sustainability Reporting Directive (CSRD) reporting from 1,750 to 1,000. This reduction means that some mid-sized companies that were previously excluded from environmental reporting by an earlier agreement will now have to report on issues including climate financial risks, greenhouse gas (GHG) emissions, carbon reduction plans and water usage.

In February 2025, the Commission issued Omnibus I proposals to simplify sustainability regulations (see EU climate reporting: simplification is not simple). Omnibus I proposed to exempt smaller companies from environmental reporting under the CSRD and the Corporate Sustainability Due Diligence Directive (CSDDD).

In November 2025, the European Parliament voted to exempt more companies by raising the CSRD reporting threshold to 1,750 employees, and the CSDDD thresholds to those companies with 5,000 employees and €1.5 billion turnover (see EU makes more cuts to environmental reporting).

In the last weeks leading up to the end-of-2025 deadline for changes, negotiations between the Commission, European Parliament and the EU member states (the Trilogue) have resulted in a partial reversal of the November’s revisions. This decision places a significant number of companies back into the scope of the CSRD, while leaving the proposals for the CSDDD under Omnibus I unchanged (see Table 1):

• CSRD. Reporting for this directive includes areas such as operational and supply chain GHG emissions, carbon reduction plans, the financial impacts of physical and business climate risks, water usage, waste generation and social impacts. The Commission originally intended to apply this to virtually all companies eventually. Omnibus I proposed restricting reporting requirements to those companies with more than 1,000 employees and €450 million turnover. In November, the European Parliament raised the staff threshold to 1,750 employees. The Trilogue has now reverted to Omnibus I’s original 1,000 employee threshold.
• CSDDD. Reporting for this directive requires companies to mitigate adverse human rights and environmental impacts in their supply chain. The Commission originally intended to apply reporting requirements for this directive to those companies with more than 1,000 employees and €450 million turnover. These thresholds were unchanged by Omnibus I, but in November the European Parliament raised them to 5,000 employees and €1.5 billion turnover. The Trilogue has retained this change.

Table 1 Revisions to CSRD and CSDDD reporting

CSRD requirements apply to non-EU companies with a net turnover of €450 million generated within the EU bloc. Financial holding undertakings will be exempt.

Omnibus I was introduced after the first wave of companies began reporting. These companies have now been promised a “transition exemption” for 2025 and 2026 operating years, but whether reporting for these years will be limited or waived completely remains unclear.

Meanwhile, CSRD reporting will become easier. The Commission is expected to adopt simplifications to the European Sustainability Reporting Standards (ESRS) proposed by the European Financial Reporting Advisory Group (EFRAG). Earlier proposals for mandatory sector-specific reporting are now effectively abandoned.

Under the new deal, CSDDD reporting remains as proposed by the European Parliament in November 2025: the thresholds have been raised, and companies can rely on public information rather than demanding sustainability information from smaller companies in their supply chain. Companies with fewer than 1,000 employees can refuse to supply larger companies with reporting information beyond the voluntary ESRS.

The new CSDDD has no employee threshold for non-EU companies, so small, high-turnover non-EU companies may remain in scope.

The new deal postpones the deadline for transposition of the CSDDD into member states’ national laws until July 2028 — 1 year beyond the date proposed by Omnibus I. CSDDD reporting will begin in 2029, covering the year of 2028.

The CSDDD no longer requires a GHG emissions reduction plan compatible with the Paris Agreement.

Companies could still face fines for non-compliance with the CSDDD, but the maximum fine has been reduced from 5% to 3% of global annual turnover.

Next steps

The European Parliament’s legal affairs committee votes on December 11, followed by a European Parliament vote on December 16), with both expected to approve the proposals. The final wording must then be approved by the European Council, reviewed for consistency by specialist lawyers, translated into the 24 official European languages and signed by the Presidents of the European Parliament and Council. Once published in The Official Journal of the European Union, the much-amended Omnibus I comes into effect 20 days later and member states are required to implement it into national law within 12 months.

Companies removed from CSDDD reporting in November can expect to remain out of scope. Those who saw a reprieve from CSRD should reset their plans to the original Omnibus I proposals from February.

Uptime Institute recommends that operators who have fallen under previous CSDDD or CSRD reporting requirements remain alert. The Commission and European Parliament have amended multiple directives to a tight deadline, and there is a risk of unintended consequences.

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