A provisional agreement has been reached to simplify sustainability reporting and due diligence requirements in an attempt to boost EU competitiveness.

To some this is a deliberate "watering down" sustainability by scaling back corporate reporting and due diligence rules (CSRD, CSDDD), raising company size thresholds, and dropping mandatory climate plans to boost business competitiveness amidst industry pressure.

On the CSRD, it is proposed to increase the employee threshold to 1,000 employees and to remove listed SMEs from the scope of the directive. In the provisional agreement, the co-legislators added a net turnover threshold of over €450m to further alleviate the reporting burden on undertakings.

There will be a lower level of due diligence (CSDDD) with reduced legal obligations for companies to address climate risks and environmental impacts. An obligation for large companies to set concrete climate transition plans has also been deleted.

Morten Bødskov(pictured), Minister for industry, business and financial affairs of Denmark commented: “For years, European businesses have faced wave after wave of red tape. This has slowed green investments and weakened our competitiveness. Now we are taking a big and important step in the right direction. With clear and simple rules, companies can focus on their core business, so we achieve better value for money in the green transition, create European jobs and strengthen companies' ability to grow and invest. The Danish Presidency has pushed for this outcome, and we are keeping up the pace.”

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