The European Parliament has approved changes to the Corporate Sustainability Reporting Directive, requiring larger EU companies and non-EU groups with significant revenue to conduct sustainability reporting. Small and medium-sized enterprises are exempt, and sector-specific disclosures are now optional. The rules also limit due diligence obligations to the largest companies.

Businesses not covered by the revised rules will not need to report for the 2025/26 financial year. The Corporate Sustainability Due Diligence Directive focuses on critical risks for companies with over 5,000 employees and a turnover of at least €1.5bn. Penalties for breaches are capped at 3% of global turnover, with the rules set to go into effect in 2029.

ICAEW Sustainability director advises companies to plan for both the CSRD and International Sustainability Standards Board requirements, as the UK is expected to publish its own sustainability reporting standards aligned with the ISSB. Companies in scope of the CSRD should prepare for both frameworks to ensure transparency and compliance.

Read more at Yahoo Finance: EU Parliament backs Omnibus I reducing CSRD and CSDDD scope