On 25 June 2025, the Council of the European Union ("Council") reached an agreement on its negotiating position regarding the substantive changes to CSRD and CSDDD. The key takeaways of the position which expand on the Commission’s Omnibus are as follows:

• On CSRD, there are two main changes not included in the original Commission’s Omnibus proposal:
  • Support the Commission proposal on scoping for EU companies to set a threshold of 1.000 employees, but go beyond the initial proposal to increase the financial net turnover threshold on an individual or group level to EUR 450 mi. in net turnover (from EUR 50 mi. previously).
  • Slightly amend the requirement to disclose any existing transition plan which “contributes” to the transition to a sustainable economy (as opposed to plans that (…) “are compatible” with the transition to a sustainable economy).
• On CSDDD, the main changes which go beyond the Commission’s Omnibus proposal are:
  • A proposal on scoping, raising thresholds to only include EU companies with at least 5.000 employees and EUR 1.5 bio. net turnover or third-country companies with more than EUR 1.5 bio. net turnover in the EU. No changes have been included in relation to franchising/licencing companies.
  • Going beyond not only the original Omnibus but also the approved “stop-the-clock” Directive, a proposal to postpone the transposition and first-time application by another year (first-time application would thus be 26 July 2029).
  • Propose due diligence focused on a risk-based approach, with companies required to only conduct a general exercise (rather than an entity-based comprehensive scoping) to identify risks within their own operations, subsidiaries and direct business partners (Tier 1) using “reasonably available information” (as opposed to the Commission’s "plausible" information proposal). There remains however an obligation to move beyond Tier 1 and perform in-depth due diligence where there is objective and verifiable information on adverse impacts at an indirect business partner’s level.
  • On climate transition plans, the proposal  not only excludes the requirement to ‘put into effect’ but softens the substantive requirements of the transition plan, by requiring “reasonable” efforts (as opposed to “best” efforts) and that the transition plan “contributes” to (as opposed to “being compatible” with) the transition to a sustainable economy and to the limiting of global warming in line with the Paris Agreement (as opposed to “limiting of global warming to 1,5 o C”). It would also empower supervisory authorities to advise companies on design and implementation of those plans. Lastly, it postpones the obligation to adopt transition plans by two years (it being optional until then).
  • On penalties, the proposal would require Member States to ensure that the maximum limit of pecuniary penalties is set at 5% of the net worldwide turnover of the company. This is more prescriptive than the original Commission’s proposal which stated that Member States should not set a maximum limit of pecuniary penalties.

1 Corporate Sustainability Reporting Directive 
2 Corporate Sustainability Due Diligence Directive
3 Taxonomy Regulation