European Council adopts simplified sustainability reporting laws

Core Insights - The European Council has approved changes to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), marking the end of a simplification process initiated nearly a year ago [3][6] - The new regulations are expected to significantly reduce the number of companies subject to these directives, with estimates indicating that 90% of companies will be removed from the CSRD scope and 70% from the CSDDD scope [6] CSRD Changes - The CSRD will now apply to companies with over 1,000 employees and €450 million ($531 million) in revenue [4] - Non-EU companies with a parent entity generating over €450 million in EU revenue and EU-based subsidiaries with over €200 million ($236 million) in revenue will also be required to comply [4] CSDDD Changes - The CSDDD will apply to EU companies with over 5,000 employees and €1.5 billion ($1.77 billion) in revenue [5] - Non-EU entities with over €1.5 billion in EU revenue will also be required to report under the CSDDD, and the modified directive has removed the requirement for companies to adopt and share a transition plan [5] Implementation Timeline - The first wave of companies will have until 2028 to comply with the CSRD, while compliance with the CSDDD will be required by 2029 [3][6]