The European Union has approved a sweeping revision of corporate sustainability rules initially designed to hold companies accountable for environmental and human-rights risks across their supply chains.
The EU member states on Tuesday finalised the “Omnibus” package, intended to simplify sustainability and due diligence reporting in the bloc.The reforms amend the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), originally introduced to strengthen oversight of corporate impacts globally.
Among the most significant changes is the drastic narrowing of scope for which companies must abide by reporting rules. Under the revised framework, due-diligence rules will now apply only to companies with more than 5,000 employees and €1.5 billion ($1.8 billion) in global turnover, while reporting obligations will cover firms exceeding 1,000 employees and €450 million in turnover. The higher thresholds significantly reduce the number of companies required to report on environmental impact, labour practices and governance risks across their operations and supply chains, excluding many businesses in high-risk sectors such as fashion
The package also removes mandatory climate transition plans from the due-diligence directive and drops provisions aimed at harmonising civil liability across the EU, meaning enforcement and access to justice will depend largely on national legal systems.
EU policymakers say the revisions are intended to cut red tape and strengthen competitiveness by easing compliance burdens on businesses.
The Omnibus initiative was first proposed in February 2025 as part of a broader effort to simplify sustainability legislation and reduce administrative costs. The new, diluted requirements are set to come into force on March 18 this year.
Explainer: What the EU’s Moves to Water Down Sustainability Rules Mean for Fashion
After months of political wrangling, Europe’s Parliament has reached a deal to significantly scale back landmark corporate sustainability rules, paving the way for much laxer environmental reporting and due diligence requirements for large fashion brands.
