EU to Pare Back Sustainability Rules for Companies, Draft Shows

The European Commission plans to cut back the number of companies facing EU sustainability reporting requirements, as part of its drive to cut red tape for businesses, a draft document seen by Reuters showed.

Brussels plans to publish next week an “omnibus” proposal to simplify green rules for businesses, aiming to make local industries more competitive and respond to US President Donald Trump’s promise to scrap regulations.

The European Union is also facing competing calls from member countries including Germany and France demanding the green reporting rules are weakened - and others, including Spain, which have argued the rules are key to upholding the EU’s values on the environment and human rights.

A partial draft of the upcoming proposals, seen by Reuters on Saturday, showed the Commission is planning changes to the EU’s corporate sustainability reporting directive, which requires companies to disclose information about their environmental and social sustainability.

Under the draft proposal, which could still change before it is published, only companies with more than 1,000 employees and a net turnover exceeding 450 million euros ($471 million) would be subject to the rules' obligations.

Currently, the rules apply to firms with more than 250 employees and a 40-million-euro turnover. The EU would also cancel its plans to adopt sector-specific reporting standards by next June, the draft said.

The document also detailed plans to delay the EU’s due diligence law - known as the CSDDD - which aims to ensure companies find and fix human rights and environmental issues in their supply chains, by imposing due diligence requirements upon large companies.

The draft proposal would require companies to only undertake in-depth assessments of their direct business partners, and subsidiaries, leaving out other subcontractors and suppliers in their supply chains.

By Kate Abnett; Editing by Emelia Sithole-Matarise

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