CSRD And CSDDD - European Parliament Adopts Negotiating Mandate On Omnibus Simplification Package

On 13 November 2025, the European Parliament adopted its negotiating mandate on the Omnibus I simplification package proposed by the European Commission in February 2025. The Omnibus simplification package aims to make substantive amendments to both the Corporate Sustainability Reporting Directive ("CSRD") and the Corporate Sustainability Due Diligence Directive ("CSDDD"), with the goal of simplifying requirements and reducing companies' administrative burdens.

The adoption of the European Parliament's mandate follows a period of concentrated and wide-ranging negotiations, as well as an unsuccessful attempt in October 2025 to adopt the negotiating mandate using an accelerated legislative procedure that did not require a full vote of the European Parliament.

Following further negotiations and the successful passing of the vote in a full session of the European Parliament, the European Parliament now holds its formal negotiation position for upcoming trilogue discussions with the Council of the EU and the European Commission, which are aimed at reaching a final legislative agreement. In June 2025, the Council adopted its negotiating position for the upcoming trilogue negotiations.

The European Parliament's negotiating mandate supports significant changes to the scope and operational requirements of both CSRD and CSDDD. Key aspects of the European Parliament's position include:

• Increases in applicability thresholds:
  
  • For CSRD, the European Parliament supports an increase in the employee threshold for EU companies to be in scope to an average of 1,750 employees (compared with 1,000 in the Council's negotiating position) and an increased turnover requirement of €450 million (which is in line with the Council's position). The same increased thresholds would also apply for EU Taxonomy reporting. Non-EU companies would be in scope if they had listed securities (and met the above thresholds) or generated more than €450 million in the EU (for two consecutive years) and had a "large" EU subsidiary or branch that generated more than €50 million.
  • For CSDDD, consistent with the Council's position, the European Parliament supports the thresholds for EU companies to be in scope to be increased to 5,000 employees and a turnover exceeding €1.5 billion (with non-EU companies in scope if they generated net turnover of more than €1.5 billion in the EU). These changes are intended to limit compliance obligations for mid-sized companies while ensuring that the largest operators with the most extensive value chains remain within scope.

• Significant simplifications to reporting and due-diligence duties:
  
  • For CSRD, the European Parliament supports sector-specific reporting standards, which were originally intended to be mandatory, becoming voluntary, reducing the complexity of disclosures and providing companies with greater flexibility. Reporting standards would be further simplified and reduced, requiring fewer qualitative details. Such aims are consistent with the original Omnibus package proposals and the Council's position. To further ease the reporting burden, the European Parliament's mandate also calls for the Commission to establish a digital portal providing free access to templates, guidelines and information on EU reporting requirements complementing the European Single Access Point.
  • For CSDDD, the European Parliament's mandate reflects a risk-based approach to value-chain due diligence - companies would be required to conduct deeper mapping only where there is objectively verifiable information indicating adverse impacts beyond their direct business partners. This adjustment represents a notable narrowing of due diligence expectations compared with earlier drafts. This proposed risk-based approach differs from the version proposed in the Council's negotiating mandate and this topic is expected to be further debated during the trilogue negotiations.
    
    
  • The European Parliament also removes the requirement for companies to adopt a formal climate transition plan, reflecting an effort to minimize overlap with existing or forthcoming climate-related obligations. This position goes further than the Council's position, which, subject to certain reliefs and exceptions, retains the requirement to prepare a transition plan.

• A tightening of information-request obligations (Value Chain Cap): In respect of each of CSRD and CSDDD, efforts have been introduced to reduce burdens on smaller (out of scope) business partners. Companies will only be required to seek information from such partners where necessary and where the information cannot be obtained from other sources to reduce unnecessary administrative burdens across supply chains.
• Member State-Level Civil Liability for CSDDD. Similar to the approach proposed by the Commission and adopted by the Council in its negotiating mandate, the European Parliament supports removal of a harmonized civil liability regime for CSDDD, instead requiring breaches of due diligence obligations to be governed by the law of the relevant Member State.

Next Steps

The European Parliament, the Council and the Commission will now seek to reconcile their positions on the amendments to CSRD and CSDDD through trilogue negotiations. Trilogue negotiations will begin on 18 November 2025, with legislators aiming to reach a provisional agreement on the amendments by the end of 2025.

Although the European Parliament's mandate points toward a narrowing and simplification of obligations, there is currently no clarity on where the trilogue negotiations will land or how far the institutions may be willing to align with one another on scope, thresholds or substantive obligations. There remain substantive differences between the Council's and the European Parliament's negotiating mandates, for example with respect to value chain due diligence for CSDDD and the structure of the risk-based due-diligence framework. Only once the trilogue negotiations have concluded will businesses have comfort and certainty regarding the scope and timing of these reduced CSRD and CSDDD obligations.

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