EU: Changes to CSRD and CSDDD under Omnibus I: Trilogues have commenced. What are the starting positions of the parties?

Topic

Commission proposal

Council

Parliament

Scope - EU companies 
(and non-EU companies with securities on an EU regulated market)

Net turnover: “large”* EU undertaking or parent undertaking of a “large” group.

Headcount: 1,000 employees.

* An undertaking / group is “large” if it fulfils 2 of the following 3 criteria: (i) EUR 25 million balance sheet; (ii) EUR 50 million net turnover; and (iii) 250 employees.

Net turnover: EUR 450 million net turnover (unconsolidated unless it is a parent).

Headcount: 1,000 employees.

Net turnover: EUR 450 million net turnover (unconsolidated unless it is a parent).

Headcount: 1,750 employees.

Scope – Non-EU companies 
(Art 40a)

Net turnover: Non-EU parent has:

• EUR 450 million net turnover in the EU (consolidated); and

• a “large” EU subsidiary or branch generating net turnover of EUR 50 million (in each case on an unconsolidated basis).

Same as Commission’s position.

Net turnover: Non-EU parent has an EU subsidiary or branch that has more than EUR 450 million net turnover (in each case on an unconsolidated basis) 

Headcount: N/A.

Value chain cap (i.e. when can an in-scope company request sustainability information from other companies in their value chain)

Companies should not seek sustainability information from companies in their value chain which have fewer than 1,000 employees unless that information is within the scope of the voluntary standards or commonly shared between undertakings in the relevant sector.

Similar in principle to the Commission’s position with slight changes to the mechanics. 

Does not include a provision for information that is “commonly shared” in the relevant sector. 

Contract clauses seeking information beyond the scope of the voluntary standards will not be binding. 

Broadly aligned with the Commission’s position, but applies increased employee threshold (1,750 employees) and a net turnover requirement (EUR 450 million). 

Includes additional requirements to explain efforts made to obtain value chain information.  

Transition plans

No changes to the CSRD provisions. 

Amendment of description of transition plan that must be reported under the ESRS to lower level of prescriptiveness (e.g., business model and strategy only required to “contribute to” transition rather than be “compatible” with the transition; reference to 1.5°C is removed).

No changes to the CSRD provisions.

Reporting carve-outs

N/A

Carve-outs for commercial sensitive information, trade secrets, intellectual property etc. 

Carve-outs for intellectual property, trade secrets etc.

Taxonomy

Taxonomy reporting becomes optional (and more flexible) in certain circumstances for EU undertakings that are in scope but do not have a net turnover exceeding EUR 450 million (individually or on a consolidated basis).

Position aligned with the Commission’s proposal.   

Position aligned with the Commission’s proposal.  

Assurance 

Future uplift in assurance requirements from limited assurance to reasonable assurance is removed. 

Aligned with the Commission’s proposal to remove reasonable assurance. 

Aligned with the Commission’s proposal to remove reasonable assurance. 

Requires the Commission to adopt limited assurance standards by 1 October 2026. 

Topic

Commission proposal

Council

Parliament

Scope - EU companies

The Commission does not propose any changes to the current scoping tests.

Net turnover: EUR 450 million net turnover globally (unconsolidated unless it is ultimate parent).

Headcount: 1,000 employees.

Net turnover: EUR 1.5 billion net turnover globally (unconsolidated unless it is ultimate parent).

Headcount: 5,000 employees.

Same as Council’s position.

Scope - 
Non-EU companies

The Commission does not propose any changes to the current scoping tests

Net turnover: EUR 450 million net turnover in the EU (unconsolidated unless it is ultimate parent)

Headcount: N/A 

Net turnover: EUR 1.5 billion net turnover in the EU (unconsolidated unless it is ultimate parent)

Headcount: N/A 

Same as Council’s position.

Application date

No change.

Application date pushed back by one year to 26 July 2029.

Application date for transition plans pushed back to July 2031.

No change.

Transition plans 

Mandatory transition plan still required, but includes tweaks to specific requirements from existing position such as:

• Removal of obligation to “put into effect”

• New requirement to include “implementing actions” in transition plan. 

Mandatory transition plan still required, but softening of specific requirements from Commission’s proposal such as:

• Replacement of “best efforts” with “reasonable efforts”

• Removal of mandatory design features (e.g., setting targets) 

• Removal of requirement to include “implementing actions”

• Removal of reference to 1.5°C, but reference to Paris Agreement retained.

Mandatory transition plan requirement deleted entirely. 

Due diligence

Limits requirement to conduct in-depth assessments to Tier 1. 

Companies would only be required to carry out assessments of indirect business partners based on plausible information suggesting that adverse impacts have arisen or may arise.

Limits requirement to conduct in-depth assessments to Tier 1. 

Similar in principle to the Commission’s proposal, but provides additional specificity around when assessment of indirect business partners is required. 

Risk-based approach to assessments rather than a limitation to Tier 1.

Value chain cap 

Value chain cap applies to companies with fewer than 500 employees.

Information limited to that within the scope of the voluntary standards (subject to certain exceptions).  

Similar in principle to the Commission, but nuances to how the cap works in practice (e.g., what information can be requested and in what circumstances).

Value chain cap applies to companies with fewer than 1,000 employees.

Similar in principle to the Commission, but nuances to how the cap works in practice (e.g., what information can be requested and in what circumstances).

Value chain cap applies to companies with fewer than 5,000 employees. 

Suspension/ termination of business relationships

The Commission removes the obligation to terminate business relationships as a measure of last resort but retains the possibility of suspension of business relationships in certain circumstances.

Broadly aligned with the Commission’s proposal with some minor changes in nuance.

Broadly aligned with the Commission’s proposal with some minor changes in nuance.

Additional exception where the business relationship provides a raw material, product or service that is essential and has no available alternative.

Civil liability

Provisions in the current CSDDD on harmonised (EU-wide) civil liability are removed. 

This means that civil liability would be defined by the national law of each Member State.

Aligned with the Commission’s proposal.

Aligned with the Commission’s proposal.

Penalties 

Deletes provision for penalties based on net worldwide turnover (including the minimum maximum 5% fine), with a requirement for the Commission to develop and issue guidelines on penalties.

Council sets a maximum fine of 5% of net worldwide turnover.

Aligned with the Council’s position on the maximum fine of 5% of net worldwide turnover.

It also aligns with the requirement to issue guidance but suggests this should take into account the turnover of companies.