![\"EU](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/04\/European-Flags-716x476.jpg\" "\\"EU")
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The Council of the EU has agreed<\/a> a negotiating mandate on the EU\u2019s watered down corporate sustainability reporting and due diligence rules, as part of the sustainability Omnibus<\/a>.<\/p>\n Member states met on Monday evening and reached an agreement, just before the conclusion of the Polish presidency.<\/p>\n The Council has backed the European Commission\u2019s main amendment to the Corporate Sustainability Reporting Directive (CSRD)<\/a> to increase the employee threshold to 1,000 employees and remove listed SMEs from the scope of the directive.<\/p>\n In its mandate, the Council has added a net turnover threshold of more than \u20ac450 million to \u201cfurther alleviate\u201d the reporting burden, it said.<\/p>\n It has also introduced a review clause concerning a possible extension of the scope to ensure \u201cadequate availability\u201d of corporate sustainability information.<\/p>\n For the Corporate Sustainability Due Diligence Directive (CSDDD)<\/a>, the Council has agreed to propose increasing the threshold<\/a> to 5,000 employees and \u20ac1.5 billion net turnover.<\/p>\n It said that, in its view, such companies can have the biggest influence on their value chain and are best equipped to absorb the costs and burdens of due diligence processes.<\/p>\n The Council has also proposed postponing the transposition deadline by one year, to July 2028.<\/p>\n For transition plans, these should be aligned with CSRD requirements and a clarification should be made for implementing actions to be outlined, as opposed to including an obligation to put these plans into effect.<\/p>\n The Council has also proposed postponing the requirement to adopt transition plans by two years.<\/p>\n Further adjustments include shifting from an entity-based approach to a risk-based approach, focusing on areas where \u201cactual and potential\u201d adverse impacts are most likely to occur.<\/p>\n Companies should no longer be required to conduct a comprehensive mapping exercise, but instead, a general scoping exercise, the Council said, adding that the limitation of the relevant obligations to tier 1 firms should be maintained.<\/p>\n The Council has also said the identification and assessment requirements should be extended in case of objective and verifiable information suggesting adverse impacts beyond direct business partners, and has proposed adding a review clause related to a possible extension of these obligations beyond tier 1.<\/p>\n Finally, the Council has backed the Commission\u2019s proposal to remove the EU harmonised liability regime, which an EU source told Responsible Investor<\/a> was the only pending or controversial issue as of last week.<\/p>\n The Council presidency will now be handed to Denmark, which will enter into negotiations with the European Parliament once the latter reaches its own negotiating position. This will most likely not be before October.<\/p>\n The Parliament\u2019s lead Omnibus negotiator, Swedish MEP J\u00f6rgen Warborn of the centre-right European People\u2019s Party (EPP) \u2013 the largest political group in the Parliament \u2013 will today present his draft report at a legal affairs committee meeting, where the other political parties will also share their views.<\/p>\n Key proposals from the rapporteur\u2019s report<\/a> include watering down the scope of both regulations to companies with 3,000 employees and \u20ac450 million in turnover, and removing transition plan asks.<\/p>\n The deadline for MEPs to file amendments to his proposals is Friday (27 June).<\/p>\n Green Claims Directive<\/strong><\/p>\n The Commission has defended its decision to withdraw a greenwashing law<\/a> introduced in 2022 to ensure consumers receive \u201cadequate information\u201d on products\u2019 durability and reparability.<\/p>\n The move followed calls from EPP for the EU executive to withdraw the proposal.<\/p>\n The Council has since cancelled<\/a> its trilogue discussions with the Parliament, which were due to take place Monday (23 June).<\/p>\n