EU narrows Corporate Sustainability Due Diligence rules after industry pressure

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🗞️ Driving the news: EU member states have approved major rollbacks to the Corporate Sustainability Due Diligence Directive (CSDDD) and tightened thresholds under the Corporate Sustainability Reporting Directive (CSRD)
• The changes sharply reduce the number of companies subject to supply chain due diligence and sustainability reporting rules

🔭 The context: The revised CSDDD will now apply only to companies with more than 5,000 employees and €1.5bn in annual turnover
• Compliance is delayed until 2029, and the obligation to adopt climate transition plans has been removed
• CSRD reporting thresholds were raised from 250 employees to 1,000 employees and €450m turnover
• Industry groups and foreign governments, including the U.S. and Qatar, had warned of competitiveness and energy supply risks

🌍 Why it matters for the planet: Narrowing scope and removing climate transition plan requirements may weaken corporate accountability on deforestation, human rights and emissions reduction
• Fewer reporting entities could limit ESG data availability, complicating investor assessment of climate and supply chain risks
• The shift signals a more cautious, competitiveness-driven phase in EU sustainability governance

⏭️ What’s next: The largest multinationals will still face due diligence obligations, with fines up to 3% of global turnover for breaches
• Investors and policymakers will watch whether further revisions follow amid ongoing geopolitical and economic pressure

💬 One quote: “We are reducing unnecessary and disproportionate burdens on our businesses, with simpler, more targeted and more proportionate rules.” — Marilena Raouna, Cyprus’s Deputy EU Affairs Minister

📈 One stat: The directive now applies only to firms with 5,000+ employees and €1.5bn turnover, significantly shrinking its original scope

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