Member states have approved a pared-down version of the EU’s corporate sustainability rules, focusing mainly on the largest companies and extending key deadlines. Proponents claim the revisions reduce bureaucracy and maintain competitiveness; opponents believe they diminish a mechanism designed to tackle human rights violations and environmental damage in global supply chains.
On Tuesday, 24 February 2026, EU countries finalized new requirements under the Corporate Sustainability Due Diligence Directive (CSDDD) and related reporting rules, which some EU officials and capitals describe as simplification.
The revisions mean due-diligence obligations will mostly apply to large EU firms with over 5,000 employees and €1.5 billion in turnover, and equivalent non-EU companies in the market. The compliance date moves from mid-2027 to mid-2029. The climate transition plan requirement is removed from the framework.
Additionally, changes to the Corporate Sustainability Reporting Directive (CSRD) raise the reporting threshold to companies with more than 1,000 employees and €450 million turnover, excluding many firms that were preparing new disclosures.
The original intent was to make European companies address risks like forced labor or environmental harm in global supply chains. However, there was opposition due to compliance costs and legal uncertainties. Some governments and industry groups have pushed to dilute the rules, arguing Europe faces rising regulations amid intensifying competition with the U.S. and China.
Corporate accountability and human-rights groups criticize the decision, warning it reduces victims’ options for remedy and companies’ incentives to address harm early. Advocacy groups argue the directive’s reduced scope weakens its impact at a time when it was supposed to standardize the market.
The decision adds to a broader debate in Brussels about defining “competitiveness” in EU law—whether it means reducing bureaucracy or strengthening enforcement to encourage responsibility and deter abuse.
With the Council’s approval, the revised framework will be formalized soon, followed by national implementation by member states.
Readers following this policy development can refer to The European Times’ previous coverage, which reported on the Council’s earlier efforts to streamline sustainability reporting and due-diligence requirements. The political debate is expected to continue, with scrutiny on whether new standards provide effective risk management or mainly reduce oversight.
Details of the decision were reported by Reuters, while the Council’s corporate sustainability page offers background material on the policy.
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