EU: Council agrees its negotiating position on the substantive changes to CSRD and CSDDD

On 23 June 2025, the Council agreed its negotiating position (general approach) on the Requirements Proposal (see Council press release). The Requirements Proposal forms part of the Omnibus I packages and proposes substantive changes to the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD or CS3D), including changes to reduce the number of CSRD in-scope companies. For more information on the Requirements Proposal, see our previous blog post. 

The Council’s negotiating position will form the basis of its position in the interinstitutional negotiations (trilogues) with the European Parliament. 

The key positions from the Council’s negotiating position are outlined out below.

CSRD

• Scoping thresholds: These would be increased to EUR 450 million net turnover in addition to the already increased 1,000 employee threshold for EU companies, with early relief for current reporters who would ultimately fall out of scope under these tests if revised.
• Expanded information carve-outs: These would be expanded to include information seriously prejudicial to the commercial position of the company, information corresponding to intellectual capital/property that qualifies as a trade secret, classified information, and information protected from unauthorised access or disclosure under applicable law.
• Value chain cap: The Council has adopted the Commission’s position but has narrowed it further by removing the requirement to seek information from entities in the value chain if the relevant information is commonly shared in the relevant sector. It would also make clear that contract clauses will not be binding if they seek information beyond the scope of the voluntary ESRS from entities in the value chain with less than 1,000 employees.
• Taxonomy: No additional reliefs, primarily because scoping thresholds as a whole would be aligned with the position on reliefs put forward by the Commission.

CSDDD

• Scoping thresholds: Although there was originally no change proposed by the Commission, the Council proposes that these be increased to EUR 1.5 billion net turnover in addition to an increase to a 5,000 employee threshold for EU companies, essentially limiting application to the original first wave of in-scope companies only.
• Application date: This would be pushed back by one year to 26 July 2029.
• Level of due diligence: Due diligence to be focused on own operations and tier 1 business partners. In-depth assessment of indirect business partners would only be required where the company has, or can be reasonably expected to know of, objective and verifiable information that suggest that adverse impacts have arisen or have a reasonable prospect of arising in the operations of an indirect business partner.
• Value chain cap: The Council suggests a more targeted approach to gathering information on the value chain, and for the purposes of identifying where adverse impacts are likely to occur in tier 1, requests for information may only be made to companies with less than 1,000 employees where the information cannot reasonably be obtained by other means.
• Transition plans: These would only become mandatory from July 2031. Previously mandatory design features (including the setting of targets) would be optional. The plan would need to ensure through reasonable (rather than best) efforts that the company’s business model and strategy “contribute to” (rather than are “compatible with”) the transition to a sustainable economy, etc. Express references to the limiting of global warming to 1.5C would be removed (but references to the Paris Agreement would remain).
• Penalties / civil liability: The Council would set a maximum fine of 5% of worldwide turnover (in contrast to the position in the CSDDD as adopted where this is a minimum maximum fine). Harmonised civil liability provisions would be removed similar to the Commission proposal. 

Next steps

Before the trilogues can begin, the European Parliament needs to adopt its negotiating position on the proposal. The draft Parliament JURI Report on the Requirements Proposal is in circulation with the JURI committee expected to vote on the report in July. The Parliament will then vote on its final negotiating position in October 2025.  

Further information

See our EU Omnibus Tracker for details on the current status of other changes to EU sustainability rules.