European Parliament adopts position on corporate sustainability reporting directive amendments
The European Parliament’s Committee on Legal Affairs has adopted its position on first reading on the European Commission’s proposal to amend Directives 2006/43/EC, 2013/34/EU, (EU) 2022/2464, and (EU) 2024/1760, which relate to corporate sustainability reporting and due diligence. The revisions aim to streamline compliance obligations while remaining aligned with the European Green Deal and Sustainable Finance Action Plan. Mandatory sustainability reporting is now limited to undertakings with over 5,000 employees and a net turnover exceeding €450m, with exemptions for certain financial holding companies and subsidiaries already covered by equivalent third-country reports. Companies may use default values where value chain data is restricted by law. The Commission must adopt limited assurance standards by October 2026 after consulting the European Financial Reporting Advisory Group, and develop voluntary reporting standards for SMEs that are proportionate, modular, and interoperable, while explicitly protecting trade secrets under Directive (EU) 2016/943.