Dive Brief:
- More than 300 organizations, including financial institutions, companies and advocacy groups, have asked the European Union to “preserve the core” of the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive, according to an August 1 announcement by the European Sustainable Investment Forum (Eurosif).
- In a joint statement first released July 1 with 198 signatories, the organizations asked EU lawmakers to include companies with more than 500 employees in the scope of CSRD, which was originally enacted in 2022. Proposed trims to sustainability legislation, a so-called “omnibus package” adopted by the European Commission in February 2025, reduced CSRD’s scope from its current form, applying to companies with 250 employees, to companies with 1,000 employees.
- The proposal is now with the European Parliament’s Committee for Legal Affairs (JURI), which plans to vote on amendments to the law on October 13, according to a preliminary timeline. Afterwards, the legislation will face a vote in the European Parliament, likely later in the month.
Dive Insight:
The joint statement first appeared in an early form in February, just ahead of the omnibus vote, and was organized by Eurosif, reporting nonprofit Global Reporting Initiative and several other investor groups. The 323 signatories now include Nokia, IKEA parent company Ingka Group and French utility company Electricité de France.
The statement calls for the CSDDD to require companies to adopt climate transition plans that include science-based targets. It also critiques the omnibus’s proposed “value chain cap,” which limits information that companies who are within scope for CSRD can request from companies in their value chains who are outside of scope.
“If investors need to make additional efforts to gather relevant information, this could deter investment in small to midsize companies and risks concentrating sustainable investment benefits to the largest EU companies,” according to the joint statement.
The omnibus’ proposal would also limit the “due diligence” aspect of CSDDD to direct business partners. Companies would only be obligated to go deeper into their value chain “in cases where the company has plausible information suggesting that adverse impacts have arisen or may arise there,” according to the European Parliament’s description. The joint statement asks the EU to maintain risk-based corporate due diligence because of their importance for investors in terms of risk management.
“We support simplifying the CSRD and CSDDD. At the same time, it’s important to keep the key rules,” said Günther Thallinger, board member at global insurer and asset manager Allianz, in Eurosif’s July 1 release. “These ensure companies provide complete and reliable data for investment decisions and transformative actions.”
The European Commission has taken note of the statement, a spokesperson said in an email to ESG Dive. The spokesperson also reiterated Commission president Ursula Von Der Leyen’s commitment to achieving a 25% reduction in administrative burdens for companies and at least 35% for small-to-medium enterprises.
“Many companies and stakeholders have highlighted difficulties in applying certain provisions, noting that the accumulation of requirements sometimes leads to contradictions or overlaps,” the spokesperson said in email, adding that the Commission wants to avoid hurting SMEs with rules designed for larger companies.
“Our work on simplification does not mean deregulation,” the spokesperson said. “It does not mean abolishing our policy goals or our high social and environmental standards, but on the contrary, delivering them as efficiently as possible.”
